[ET Net News Agency, 3 December 2018] Goldman Sachs initiated coverage on China Railway
Group (CRG)(00390) with a "sell" rating and a target price of HK$6.4.
In spite of the government's pro-investment support announced in 3Q, the research house
believes new order momentum is unlikely to turn significantly upwards given the focus on
existing projects.
Goldman therefore projected a 3% CAGR for CRG's new orders over 2018-20. Moreover, CRG's
heavy involvement in investment projects and more aggressive stance towards property
business will likely start to weigh on the C/F and B/S going forward, pressuring its
cash-based return profile. (KL)