[ET Net News Agency, 9 September 2020] Guotai Junan International maintained its target
price for CRRC Corporation (01766) unchanged at HK$5.12 but upgraded its rating to "buy"
as it thinks the stock is deeply undervalued at the current price with its dominant market
position and steady growth prospect.
The research house said CRRC's 1H results were generally in line. During 1H, the company
received RMB102.3 billion in new contracts, down 21.4%, of which RMB10.4 billion was from
overseas, down 11.9%.
Guotai Junan expects revenue CAGR of railway equipment, rapid transit vehicles and urban
infrastructure, new businesses, and modern services to be 7.0%, 11%, 12.2%, and -6%,
respectively, in 2019-2022, while overall revenue CAGR to be 7.0%.
In addition, it expects gross margin to stay between 22.5%-22.7% in 2020-2022. (KL)