[ET Net News Agency, 8 September 2017] Credit Suisse raised its target price for China
Railway Signal & Communication (CRSC)(03969) to HK$6.5 from HK$6.05, and maintained its
"neutral" rating.
The research house said CRSC's 1H results slightly beat its estimates on effective cost
control and better gross margin (only down 1% YoY despite unfavourable product mix).
Management believes CRSC is on track to meet its 30% YoY new order growth target for
2017, driven by the Construction segment. Credit Suisse believes tenders for railway
equipment will gradually pick up in 2H, given increasing new length addition in 2018-19.
Credit Suisse revised up its EPS forecasts by 6-7% to factor in lower SG&A costs and
higher gross margins. (KL)