[ET Net News Agency, 23 July 2018] Daiwa Research sees that most China construction
companies to have beat or met the consensus estimates in 1H, underpinned by continual
profitability improvement and strong earnings growth in 1Q.
However, China railway equipment makers will miss on postponed delivery of locomotives
and urban transit-related products in 1H, the research house noted. Daiwa forecast new
order growth for constructors to decelerate in 2Q, given a high base in 2Q 2017 and slower
contract signing.
Daiwa expects most construction companies to post higher gross margins in 1H, led by a
changing product mix (more exposure to higher-margin businesses). As most constructors are
proactively deleveraging and lowering their debt sizes, it sees their finance cost growth
decelerating in 2Q, which will lead to higher growth in net profit than that in revenue.
It thinks CRCC (01186) and CCC (01800) could beat expectations in 1H on strong growth
momentum. (KL)
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03311 CHINA STATE CON
Nominal 
8.620 +0.160 (+1.891%) Others
23/07/2018 10:34
[I-bank focus]Divergent growth seen in railway/construction
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