[ET Net News Agency, 19 February 2021] J.P. Morgan trimmed its target price for China
Railway Group (CRG) (00390) to HK$5.1 from HK$6 and maintained its "overweight" rating on
attractive valuation.
The research house said CRG's best earnings delivery and solid cash generation during
FY2019-20 has been helped by the company's domestic focus (with its overseas exposure
being the smallest among the major infra contractors) and more cash-generative business
model (with its BOT [build-operate-transfer] and long-duration PPP [public-private
partnership] exposure being the smallest among the major infra contractors), driving the
relative outperformance in the past two years.
That said, looking ahead for 2021, JPM sees a higher comparison base for earnings
delivery. It cut its NPAT forecasts for FY2020-22 by an average of 3%. (KL)