SEHK:390

Stock Analysis Report

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Executive Summary

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.


Snowflake Analysis

Very undervalued with solid track record and pays a dividend.


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

Stable Share Price: 390 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.0%

390

-1.2%

HK Construction

1.2%

HK Market


1 Year Return

-24.1%

390

-15.5%

HK Construction

5.5%

HK Market

Return vs Industry: 390 underperformed the Hong Kong Construction industry which returned -15.7% over the past year.

Return vs Market: 390 underperformed the Hong Kong Market which returned 6.1% over the past year.


Shareholder returns

390IndustryMarket
7 Day2.0%-1.2%1.2%
30 Day-16.5%-2.1%-3.8%
90 Day-12.9%-1.1%7.7%
1 Year-20.5%-24.1%-11.0%-15.5%9.8%5.5%
3 Year-26.8%-33.4%-35.0%-43.2%3.7%-7.4%
5 Year-43.5%-50.4%-38.6%-49.2%12.3%-6.5%

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 compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 390 (HK$4) is trading below our estimate of fair value (HK$16.17)

Significantly Below Fair Value: 390 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 390 is good value based on its PE Ratio (6.2x) compared to the HK Construction industry average (8.1x).

PE vs Market: 390 is good value based on its PE Ratio (6.2x) compared to the Hong Kong market (10.4x).


Price to Earnings Growth Ratio

PEG Ratio: 390 is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: 390 is good value based on its PB Ratio (0.6x) compared to the HK Construction industry average (0.8x).


Next Steps

Future Growth

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

12.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 390's forecast earnings growth (12% per year) is above the savings rate (1.6%).

Earnings vs Market: 390's earnings (12% per year) are forecast to grow slower than the Hong Kong market (18.4% per year).

High Growth Earnings: 390's earnings are forecast to grow, but not significantly.

Revenue vs Market: 390's revenue (10.1% per year) is forecast to grow slower than the Hong Kong market (11.4% per year).

High Growth Revenue: 390's revenue (10.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 390's Return on Equity is forecast to be low in 3 years time (10.6%).


Next Steps

Past Performance

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

14.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 390 has high quality earnings.

Growing Profit Margin: 390's current net profit margins (2.6%) are higher than last year (2.3%).


Past Earnings Growth Analysis

Earnings Trend: 390's earnings have grown by 14.3% per year over the past 5 years.

Accelerating Growth: 390's earnings growth over the past year (28.1%) exceeds its 5-year average (14.3% per year).

Earnings vs Industry: 390 earnings growth over the past year (28.1%) exceeded the Construction industry -7.7%.


Return on Equity

High ROE: 390's Return on Equity (9.7%) is considered low.


Next Steps

Financial Health

How is China Railway Group's financial position?


Financial Position Analysis

Short Term Liabilities: 390's short term assets (CN¥728.3B) exceed its short term liabilities (CN¥689.6B).

Long Term Liabilities: 390's short term assets (CN¥728.3B) exceed its long term liabilities (CN¥146.8B).


Debt to Equity History and Analysis

Debt Level: 390's debt to equity ratio (90%) is considered high.

Reducing Debt: 390's debt to equity ratio has reduced from 134.8% to 90% over the past 5 years.

Debt Coverage: 390's debt is not well covered by operating cash flow (9%).

Interest Coverage: 390's interest payments on its debt are well covered by EBIT (6.2x coverage).


Balance Sheet


Next Steps

Dividend

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

2.96%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 390's dividend (2.96%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.27%).

High Dividend: 390's dividend (2.96%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.86%).


Stability and Growth of Payments

Stable Dividend: 390's dividend payments have been volatile in the past 10 years.

Growing Dividend: 390's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (18.3%), 390's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 390's dividends in 3 years are forecast to be well covered by earnings (16.5% payout ratio).


Next Steps

Management

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

2.2yrs

Average management tenure


CEO

Yun Chen (57 yo)

0.58

Tenure

CN¥545,669

Compensation

Mr. Yun Chen is Chief Executive Officer at China Railway Group Limited since 2020. He served as President of China Railway Group Limited since August 25, 2019 until 2020 and has been its executive director ...


CEO Compensation Analysis

Compensation vs Market: Yun's total compensation ($USD78.48K) is below average for companies of similar size in the Hong Kong market ($USD888.78K).

Compensation vs Earnings: Insufficient data to compare Yun's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Zongyan Zhang
Executive Chairman1yrCN¥1.67mno data
Yun Chen
President & Director0.58yrCN¥545.67kno data
Xian Zhang
VP & Executive Directorno dataCN¥1.50mno data
Cui Sun
CFO & Chief Accountant0.42yrno datano data
Tengqun Yu
VP & General Counsel6.42yrsno datano data
Dun Kong
Chief Engineer2.17yrsno datano data
Jiangqian Ma
Chief Economist2.17yrsno datano data
Shiqi Wang
Executive Director0.42yrno datano data
Wen He
Head of the Finance Department & Secretary2yrsno datano data
Longbiao Lin
Director of Internal Audit12.92yrsCN¥245.00kno data

2.2yrs

Average Tenure

55yo

Average Age

Experienced Management: 390's management team is considered experienced (2.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Zongyan Zhang
Executive Chairman1yrCN¥1.67mno data
Yun Chen
President & Director0.58yrCN¥545.67kno data
Xian Zhang
VP & Executive Directorno dataCN¥1.50mno data
Shiqi Wang
Executive Director0.42yrno datano data
Shui Ming Chung
Independent Non-Executive Director3.17yrsCN¥131.00kno data
Qingzhi Zheng
Independent Non-Executive Director6.17yrsCN¥60.00kno data
Peizhang Guo
Independent Non-Executive Director6.17yrsCN¥60.00kno data
Wenxin Chen
Shareholder Representative Supervisor9.58yrsCN¥498.00kno data
Jianyuan Liu
Employee Representative Supervisor9.58yrsCN¥406.00kno data
Baoman Wen
Independent Non-Executive Director6.17yrsCN¥60.00kno data
Zonglin Ma
Non-Executive Director3.17yrsno datano data
Huijia Zhang
Chairman of the Supervisory Committee2.17yrsno datano data

3.2yrs

Average Tenure

59yo

Average Age

Experienced Board: 390's board of directors are considered experienced (3.2 years average tenure).


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.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 7.6%.


Top Shareholders

Company Information

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


Key Information

  • Name: China Railway Group Limited
  • Ticker: 390
  • Exchange: SEHK
  • Founded: 1950
  • Industry: Construction and Engineering
  • Sector: Capital Goods
  • Market Cap: CN¥131.299b
  • Listing Market Cap: CN¥146.353b
  • Shares outstanding: 24.57b
  • Website: https://www.crec.cn

Number of Employees


Location

  • China Railway Group Limited
  • Unit 1201-1203, APEC Plaza
  • 12th Floor
  • Kowloon
  • Kowloon
  • Hong Kong

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, Hong Kong, and Macau. Its Infrastructure Construction segment ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/07 12:34
End of Day Share Price2020/08/07 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


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.