[ET Net News Agency, 26 August 2019] HSBC Global Research cut its target price for
Zhuzhou CRRC Times (03898) to HK$39 from HK$42 and maintained its "hold" rating as it
thinks the risk of developing the non-railway business could hold back earnings growth and
ROE (Return on equity) in 2019 and 2020.
The research house said CRRC's 2Q results were broadly in line with HSBC's estimate.
HSBC said the market has been too optimistic on rail equipment new orders for 2019. CRRC's
major customer, China State Railway Group Limited, is focused on earnings improvement,
increasing its load factor and lowering financial leverage.
CRRC maintained its guidance for a mild increase in total revenue and net profit for
FY2019. (KL)