[ET Net News Agency, 14 April 2020] Morgan Stanley cut its target price for CRRC Corp
(01766) to HK$7 from HK$8 and maintained its "overweight" rating.
CRRC's 1Q net profit declined 55%-65% to Rmb623mn-Rmb801mn, mainly due to a decrease in
delivery quantities of major products during the period, largely reflecting the COVID-19
outbreak. As a result, the research house trimmed its 2020, 2021 net profit forecasts by
9% and 4% to Rmb12.8bn and Rmb15.4bn.
However, Morgan sees deliveries ramping up rapidly starting in 2Q amid complete factory
resumptions. It also thinks CRRC's urban RTV (rapid transit vehicles) segment revenue can
continue to grow by 20% p.a. over the next three years. (KL)