UBS Group expects China Railway Construction Corporation to achieve a compound annual growth rate of 5.5% in earnings per share from 2023 to 2026.
According to the research report released by UBS, given the company's downward revision of its 2024 target and lower earnings per share growth, the bank maintains a neutral rating for China Railway Construction Corporation (01186). The compound annual growth rate of earnings per share from 2023 to 2026 is expected to be 5.5%, and the company's valuation is considered reasonable. The bank believes that good market sentiment, improving dividend payout ratios, and potential stock-based incentive plans have been reflected in the stock price, and the target price has been increased from HKD 4.7 to HKD 5.5.
The bank stated that it has reduced its profit forecast for China Railway Construction Corporation for 2024 to 2026 by 3% to 6% to reflect slightly lower-than-expected performance in 2023 and revised targets for 2024. Since the new chairman is expected to launch a stock-based incentive plan and the state-owned assets commission has started to drive industry sentiment through market capitalization management assessments, the H shares of this stock have risen by about 30% since its low point in January.