DB:CNO

Stock Analysis Report

China Railway Group

Executive Summary

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

Snowflake

Fundamentals

Very undervalued with adequate balance sheet.


Similar Companies

Share Price & News

How has China Railway Group's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

2.3%

DB:CNO

1.4%

DE Construction

2.6%

DE Market


1 Year Return

-16.8%

DB:CNO

-27.4%

DE Construction

-9.6%

DE Market

CNO outperformed the Construction industry which returned -28.3% over the past year.

CNO underperformed the Market in Germany which returned -10.8% over the past year.


Share holder returns

CNOIndustryMarket
7 Day2.3%1.4%2.6%
30 Day-8.3%-0.2%-3.0%
90 Day-7.4%-11.2%-1.4%
1 Year-14.7%-16.8%-24.4%-27.4%-6.8%-9.6%
3 Year-8.3%-14.2%-11.0%-17.6%11.0%1.5%
5 Year64.7%50.0%78.6%58.7%25.6%8.2%

Price Volatility Vs. Market

How volatile is China Railway Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is China Railway Group undervalued based on future cash flows and its price relative to the stock market?

>50%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

China Railway Group's share price is below the future cash flow value, and at a moderate discount (> 20%).

China Railway Group's share price is below the future cash flow value, and at a substantial discount (> 40%).


Price Based on Earnings

China Railway Group is good value based on earnings compared to the Europe Construction industry average.

China Railway Group is good value based on earnings compared to the Germany market.


Price Based on Expected Growth

China Railway Group is good value based on expected growth next year.


Price Based on Value of Assets

China Railway Group is good value based on assets compared to the Europe Construction industry average.


Next Steps

Future Growth

How is China Railway Group expected to perform in the next 1 to 3 years based on estimates from 14 analysts?

11.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

China Railway Group's revenue is expected to grow by 7.7% yearly, however this is not considered high growth (20% yearly).

China Railway Group's earnings are expected to grow by 11.3% yearly, however this is not considered high growth (20% yearly).

China Railway Group's revenue growth is expected to exceed the Germany market average.

China Railway Group's earnings growth is positive but not above the Germany market average.

China Railway Group's earnings growth is expected to exceed the low risk savings rate of 0.2%.


Earnings per Share Growth Estimates


Future Return on Equity

China Railway Group is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

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

12.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

China Railway Group's year on year earnings growth rate has been positive over the past 5 years.

China Railway Group's 1-year earnings growth is less than its 5-year average (7.6% vs 12.3%)

China Railway Group's earnings growth has not exceeded the Europe Construction industry average in the past year (7.6% vs 8.5%).


Return on Equity

China Railway Group has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

China Railway Group used its assets less efficiently than the Europe Construction industry average last year based on Return on Assets.


Return on Capital Employed

China Railway Group has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is China Railway Group's financial position?


Financial Position Analysis

China Railway Group is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

China Railway Group's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

China Railway Group's level of debt (76.7%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has been reduced over the past 5 years (177.4% vs 76.7% today).

Debt is not well covered by operating cash flow (0.7%, less than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 71.2x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is covered by short term assets, assets are 3.8x debt.


Next Steps

Dividend

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

2.55%

Expected Dividend Yield


Dividend Yield and Payments Analysis

China Railway Group's pays a higher dividend yield than the bottom 25% of dividend payers in Germany (1.55%).

China Railway Group's dividend is below the markets top 25% of dividend payers in Germany (4.22%).

China Railway Group has been paying a dividend for less than 10 years and during this time payments have been volatile (annual drop of over 20%).

Dividend payments have increased, but China Railway Group only paid a dividend in the past 9 years.


Current Payout to Shareholders

Dividends paid are well covered by earnings (5.8x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be well covered by earnings (6.1x coverage).


Next Steps

Management

What is the CEO of China Railway Group's salary, the management and board of directors tenure and is there insider trading?

5.4yrs

Average management tenure


CEO

Zongyan Zhang (56yo)

4.1yrs

Tenure

CN¥1,150,000

Compensation

Mr. Zhang Zongyan has been the President of China Railway Group Limited since July 13, 2015 and has been its Chief Executive Officer since July, 2015. Mr. Zhang served as the President of China Railway Con ...


CEO Compensation Analysis

Zongyan's remuneration is lower than average for companies of similar size in Germany.

Zongyan's compensation has increased by more than 20% in the past year whilst earnings grew less than 20%.


Management Age and Tenure

5.4yrs

Average Tenure

53yo

Average Age

The average tenure for the China Railway Group management team is over 5 years, this suggests they are a seasoned and experienced team.


Board Age and Tenure

5.2yrs

Average Tenure

58yo

Average Age

The tenure for the China Railway Group board of directors is about average.


Insider Trading

No 3 month open market individual insider trading information.


Recent Insider Transactions

SellCN¥1,360,67812 Aug 19
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares2,293,696
Max PriceCN¥0.59
BuyCN¥2,680,68307 Aug 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares4,285,870
Max PriceCN¥0.63
SellCN¥68,78626 Jul 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares104,000
Max PriceCN¥0.66
SellCN¥1,875,53326 Jul 19
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares2,835,691
Max PriceCN¥0.66
SellCN¥35,71626 Jul 19
Highbridge Capital Management, LLC
EntityCompany
Shares54,000
Max PriceCN¥0.66
BuyCN¥619,07326 Jul 19
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares936,000
Max PriceCN¥0.66
BuyCN¥2,767,11025 Jul 19
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares4,230,488
Max PriceCN¥0.65
SellCN¥1,897,09423 Jul 19
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares2,898,266
Max PriceCN¥0.65
BuyCN¥15,70923 Jul 19
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares24,000
Max PriceCN¥0.65
BuyCN¥6,54623 Jul 19
J.P. Morgan Asset Management, Inc.
EntityCompany
Shares10,000
Max PriceCN¥0.65
BuyCN¥1,118,57622 Jul 19
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares1,693,479
Max PriceCN¥0.66
SellCN¥656,98218 Jul 19
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares1,036,981
Max PriceCN¥0.63
SellCN¥7,269,14919 Jun 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares10,168,519
Max PriceCN¥0.71
BuyCN¥9,556,85214 Jun 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares13,744,050
Max PriceCN¥0.70
SellCN¥3,038,02806 Jun 19
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares4,541,814
Max PriceCN¥0.67
SellCN¥382,15001 May 19
BlackRock, Inc.
EntityCompany
Shares537,000
Max PriceCN¥0.71
BuyCN¥4,334,62401 Apr 19
J.P. Morgan Asset Management, Inc.
EntityCompany
Shares5,315,982
Max PriceCN¥0.82
SellCN¥680,73529 Mar 19
J.P. Morgan Asset Management, Inc.
EntityCompany
Shares828,559
Max PriceCN¥0.82
BuyCN¥1,294,24919 Feb 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares1,518,200
Max PriceCN¥0.85
SellCN¥887,05914 Feb 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares1,068,895
Max PriceCN¥0.83
SellCN¥5,026,84708 Feb 19
J.P. Morgan Asset Management, Inc.
EntityCompany
Shares6,135,689
Max PriceCN¥0.82
BuyCN¥5,944,32608 Feb 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares7,255,549
Max PriceCN¥0.82
SellCN¥4,961,24408 Feb 19
J.P. Morgan Asset Management, Inc.
EntityCompany
Shares6,108,405
Max PriceCN¥0.81
BuyCN¥298,02207 Dec 18
J.P. Morgan Asset Management, Inc.
EntityCompany
Shares361,028
Max PriceCN¥0.83
BuyCN¥3,817,40119 Sep 18
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares4,939,945
Max PriceCN¥0.77
SellCN¥173,35613 Sep 18
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares234,898
Max PriceCN¥0.74
BuyCN¥1,454,96710 Sep 18
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares1,985,382
Max PriceCN¥0.73
BuyCN¥1,796,77404 Sep 18
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares2,503,606
Max PriceCN¥0.72

Ownership Breakdown


Management Team

  • Tengqun Yu (49yo)

    VP & General Legal Advisor

    • Tenure: 5.4yrs
  • Longbiao Lin (62yo)

    Director of Internal Audit

    • Tenure: 11.9yrs
    • Compensation: CN¥245.00k
  • Chun Chung Tam (46yo)

    Joint Company Secretary

    • Tenure: 0.0yrs
  • Zongyan Zhang (56yo)

    CEO, President & Executive Director

    • Tenure: 4.1yrs
    • Compensation: CN¥1.15m
  • Xian Zhang (58yo)

    VP & Director

    • Tenure: 0.0yrs
    • Compensation: CN¥1.12m
  • Liang Yang (50yo)

    Chief Financial Officer

    • Tenure: 5.4yrs
  • Wen He (54yo)

    Head of the Finance Department & Secretary

    • Tenure: 5.4yrs
  • Dun Kong (53yo)

    Chief Engineer

    • Tenure: 1.2yrs
  • Jiangqian Ma (50yo)

    Chief Economist

    • Tenure: 1.2yrs

Board Members

  • Zheng Qingzhi (66yo)

    Independent Non-Executive Director

    • Tenure: 5.2yrs
    • Compensation: CN¥60.00k
  • Peizhang Guo (70yo)

    Independent Non-Executive Director

    • Tenure: 5.2yrs
    • Compensation: CN¥60.00k
  • Zongyan Zhang (56yo)

    CEO, President & Executive Director

    • Tenure: 4.1yrs
    • Compensation: CN¥1.15m
  • Xian Zhang (58yo)

    VP & Director

    • Tenure: 0.0yrs
    • Compensation: CN¥1.12m
  • Wenxin Chen (55yo)

    Shareholder Representative Supervisor

    • Tenure: 8.6yrs
    • Compensation: CN¥498.00k
  • Liu Jianyuan (57yo)

    Employee Representative Supervisor

    • Tenure: 8.6yrs
    • Compensation: CN¥406.00k
  • Baoman Wen (67yo)

    Independent Non-Executive Director

    • Tenure: 5.2yrs
    • Compensation: CN¥60.00k
  • Timpson Chung

    Independent Non-Executive Director

    • Tenure: 0.0yrs
    • Compensation: CN¥131.00k
  • Zonglin Ma

    Non-Executive Director

    • Tenure: 0.0yrs
  • Huijia Zhang

    Chairman of the Supervisory Committee

    • Tenure: 1.2yrs

Company Information

China Railway Group Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: China Railway Group Limited
  • Ticker: CNO
  • Exchange: DB
  • Founded: 1950
  • Industry: Construction and Engineering
  • Sector: Capital Goods
  • Market Cap: CN¥132.339b
  • Listing Market Cap: CN¥16.889b
  • Shares outstanding: 22.84b
  • Website: https://www.crec.cn

Number of Employees


Location

  • China Railway Group Limited
  • Buliding No. 9
  • Fuxing Road 69
  • Beijing
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
601390SHSE (Shanghai Stock Exchange)YesDomestic SharesCNCNYDec 2007
601390XSSC (Shanghai Stock Exchange - Shanghai - Hong Kong Stock Connect)YesDomestic SharesCNCNYDec 2007
390SEHK (The Stock Exchange of Hong Kong Ltd.)Foreign Shares-Foreign ListedHKHKDDec 2007
CRWO.FOTCPK (Pink Sheets LLC)Foreign Shares-Foreign ListedUSUSDDec 2007
CNODB (Deutsche Boerse AG)Foreign Shares-Foreign ListedDEEURDec 2007
390SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)Foreign Shares-Foreign ListedHKHKDDec 2007
390SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)Foreign Shares-Foreign ListedHKHKDDec 2007
CRWO.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDOct 2008

Biography

China Railway Group Limited, together with its subsidiaries, operates as an integrated construction company in the People’s Republic of China and other Asian countries. Its Infrastructure Construction segm ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/08/21 21:23
End of Day Share Price2019/08/21 00:00
Earnings2019/03/31
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.