[ET Net News Agency, 30 April 2018] HSBC Global Research cut its target price for CRRC
Corporation (01766) to HK$9.3 from HK$10, and reiterated its "buy" rating.
The research house said CRRC's 1Q earnings are not bad, but new order uncertainty
remains. The company reiterated its positive view on the railway equipment demand from
China Railway Corporation (CRC) that it could exceed the current RMB80bn budget for 2018
and should be similar to 2017, with RMB90-100bn investment in trains.
In addition to rising new track completion between 2018 and 2020, railway freight volume
increased 7.8% YoY in 1Q, and passenger volume increased 7.4%, both ahead of CRC's target
for FY2018.
HSBC lowered its FY2018 and FY2019 earnings forecast due to adjustment on the company's
new industries revenue and a higher overhead costs related to production capacity
rationalisation. (KL)