China Railway Group (SHSE:601390) - Share price, News & Analysis

Q: What is the Fair Price of 601390 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

601390 (CN¥6.14) is trading below our estimate of [[fair value]] (CN¥9.79)

601390 fundamental analysis
Snowflake Score
Valuation	6/6
Future Growth	1/6
Past Performance	3/6
Financial Health	4/6
Dividends	5/6

601390 Stock Overview

China Railway Group Limited, together with its subsidiaries, operates as an integrated construction company in the People’s Republic of China, Hong Kong, and Macau.

Rewards

Trading at 37.3% below our estimate of its fair value

Earnings are forecast to grow 11.61% per year

Earnings grew by 0.01% over the past year

Risk Analysis

Debt is not well covered by operating cash flow

Dividend of 3.19% is not well covered by earnings

China Railway Group Competitors

Power Construction Corporation of China

SHSE:601669

CN¥121.0b

China Railway Construction

SHSE:601186

CN¥99.4b

China State Construction Engineering

SHSE:601668

CN¥231.9b

China National Chemical Engineering

SHSE:601117

CN¥57.9b

Price History & Performance

Summary of all time highs, changes and price drops for China Railway Group
Historical stock prices
Current Share Price	CN¥6.14
52 Week High	CN¥7.32
52 Week Low	CN¥4.97
Beta	0.20
1 Month Change	-6.54%
3 Month Change	0.66%
1 Year Change	16.73%
3 Year Change	-7.67%
5 Year Change	-29.10%
Change since IPO	-24.10%

Shareholder Returns

	601390	CN Construction	CN Market
7D	-0.3%	1.8%	3.2%
1Y	16.7%	20.0%	-10.1%

Return vs Industry: 601390 underperformed the CN Construction industry which returned 20% over the past year.

Return vs Market: 601390 exceeded the CN Market which returned -10.1% over the past year.

Price Volatility

Is 601390's price volatile compared to industry and market?
601390 volatility
601390 Average Weekly Movement	5.4%
Construction Industry Average Movement	7.7%
Market Average Movement	7.2%
10% most volatile stocks in CN Market	10.1%
10% least volatile stocks in CN Market	5.1%

Stable Share Price: 601390 is less volatile than 75% of CN stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: 601390's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1950	294,013	n/a	https://www.crec.cn

China Railway Group Limited, together with its subsidiaries, operates as an integrated construction company in the People’s Republic of China, Hong Kong, and Macau. Its Infrastructure Construction segment constructs railways, highways, bridges, tunnels, metropolitan railways, buildings, irrigation works, hydroelectricity projects, ports, docks, airports, and other municipal works. The company’s Survey, Design and Consulting Services segment provides survey, design, consulting, research and development, feasibility study, and compliance certification services to infrastructure construction projects.

China Railway Group Fundamentals Summary

How do China Railway Group's earnings and revenue compare to its market cap?
601390 fundamental statistics
Market Cap	CN¥143.24b
Earnings (TTM)	CN¥26.57b
Revenue (TTM)	CN¥1.10t

5.7x

P/E Ratio

0.1x

P/S Ratio

Is 601390 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
601390 income statement (TTM)
Revenue	CN¥1.10t
Cost of Revenue	CN¥993.33b
Gross Profit	CN¥110.00b
Other Expenses	CN¥83.43b
Earnings	CN¥26.57b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	1.07
Gross Margin	9.97%
Net Profit Margin	2.41%
Debt/Equity Ratio	89.2%

How did 601390 perform over the long term?

See historical performance and comparison

Dividends

3.2%

Current Dividend Yield

18%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 601390 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 601390?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 601390. This is calculated by dividing 601390's market cap by their current preferred multiple.
What is 601390's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥143.24b

601390 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.4x
Enterprise Value/EBITDA	8.1x
PEG Ratio	0.5x

Price to Earnings Ratio vs Peers

How does 601390's PE Ratio compare to its peers?

601390 PE Ratio vs Peers

The above table shows the PE ratio for 601390 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	8.7x
601669 Power Construction Corporation of China	13.6x	15.9%	CN¥121.0b
601186 China Railway Construction	4.8x	13.0%	CN¥99.4b
601668 China State Construction Engineering	4.2x	11.6%	CN¥231.9b
601117 China National Chemical Engineering	11.9x	20.0%	CN¥57.9b
601390 China Railway Group	5.7x	11.6%	CN¥143.2b

Forward PE

Price-To-Earnings vs Peers: 601390 is good value based on its Price-To-Earnings Ratio (5.7x) compared to the peer average (8.7x).

Price to Earnings Ratio vs Industry

How does 601390's PE Ratio compare vs other companies in the CN Construction Industry?

Price-To-Earnings vs Industry: 601390 is good value based on its Price-To-Earnings Ratio (5.7x) compared to the CN Construction industry average (24.8x)

Price to Earnings Ratio vs Fair Ratio

What is 601390's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

601390 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	5.7x
Fair PE Ratio	23.8x

Price-To-Earnings vs Fair Ratio: 601390 is good value based on its Price-To-Earnings Ratio (5.7x) compared to the estimated Fair Price-To-Earnings Ratio (23.8x).

Share Price vs Fair Value

What is the Fair Price of 601390 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 601390 (CN¥6.14) is trading below our estimate of fair value (CN¥9.79)

Significantly Below Fair Value: 601390 is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: 601390 is good value based on its PEG Ratio (0.5x)

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Future Growth

How is China Railway Group forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

11.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 601390's forecast earnings growth (11.6% per year) is above the savings rate (3.2%).

Earnings vs Market: 601390's earnings (11.6% per year) are forecast to grow slower than the CN market (23.9% per year).

High Growth Earnings: 601390's earnings are forecast to grow, but not significantly.

Revenue vs Market: 601390's revenue (9.2% per year) is forecast to grow slower than the CN market (17.5% per year).

High Growth Revenue: 601390's revenue (9.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 601390's Return on Equity is forecast to be low in 3 years time (11.1%).

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Past Performance

How has China Railway Group performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

14.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 601390 has high quality earnings.

Growing Profit Margin: 601390's current net profit margins (2.4%) are lower than last year (2.5%).

Past Earnings Growth Analysis

Earnings Trend: 601390's earnings have grown by 14.8% per year over the past 5 years.

Accelerating Growth: 601390's earnings growth over the past year (0.01%) is below its 5-year average (14.8% per year).

Earnings vs Industry: 601390 earnings growth over the past year (0.01%) exceeded the Construction industry -2.7%.

Return on Equity

High ROE: 601390's Return on Equity (8.5%) is considered low.

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Financial Health

How is China Railway Group's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 601390's short term assets (CN¥826.3B) exceed its short term liabilities (CN¥795.2B).

Long Term Liabilities: 601390's short term assets (CN¥826.3B) exceed its long term liabilities (CN¥243.7B).

Debt to Equity History and Analysis

Debt Level: 601390's net debt to equity ratio (51.8%) is considered high.

Reducing Debt: 601390's debt to equity ratio has reduced from 103.2% to 89.2% over the past 5 years.

Debt Coverage: 601390's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: 601390's interest payments on its debt are well covered by EBIT (40.1x coverage).

Balance Sheet

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Dividend

What is China Railway Group current dividend yield, its reliability and sustainability?

Dividend Score

6/6

Dividend Score 6/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

3.19%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 601390's dividend (3.19%) is higher than the bottom 25% of dividend payers in the CN market (0.48%).

High Dividend: 601390's dividend (3.19%) is in the top 25% of dividend payers in the CN market (1.94%)

Stability and Growth of Payments

Stable Dividend: 601390's dividends per share have been stable in the past 10 years.

Growing Dividend: 601390's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (17.9%), 601390's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: 601390 is paying a dividend but the company has no free cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.9yrs

Average management tenure

CEO

China Railway Group has no CEO, or we have no data on them.

Leadership Team

Experienced Management: 601390's management team is considered experienced (3.9 years average tenure).

Board Members

Experienced Board: 601390's board of directors are not considered experienced ( 1.3 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/30 00:00
End of Day Share Price	2022/06/30 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31