reports
- Jennifer Song
Morningstar | Guangshen’s 2018 Result Implies a Net Loss in 4Q; Cutt...
We lower our fair value estimate for Guangshen to HKD 5.80 per share from HKD 6.30, following the company’s full-year 2018 result that was below our expectations. Net profit fell 23% year over year to CNY 784 million, pointing to a net loss of 180 million in the fourth quarter. We think the significant miss was primarily driven by the negative impact from the change of settlement method on freight transport, while rising overhaul and repair costs also dampened margins. Core operating performan...
- Jennifer Song
Morningstar | Guangshen’s 2018 Result Implies a Net Loss in 4Q; Cutt...
We lower our fair value estimate for Guangshen to HKD 5.80 per share from HKD 6.30, following the company’s full-year 2018 result that was below our expectations. Net profit fell 23% year over year to CNY 784 million, pointing to a net loss of 180 million in the fourth quarter. We think the significant miss was primarily driven by the negative impact from the change of settlement method on freight transport, while rising overhaul and repair costs also dampened margins. Core operating performan...
- Jennifer Song
Guangshen’s 2018 Result Implies a Net Loss in 4Q; Cutting FVE to CNY...
We lower our fair value estimate for Guangshen to HKD 5.80 per share from HKD 6.30, following the company’s full-year 2018 result that was below our expectations. Net profit fell 23% year over year to CNY 784 million, pointing to a net loss of 180 million in the fourth quarter. We think the significant miss was primarily driven by the negative impact from the change of settlement method on freight transport, while rising overhaul and repair costs also dampened margins. Core operating performan...
- Jennifer Song
Morningstar | Guangshen Sees Higher Traffic Diversion on Guangzhou-Kow...
No-moat Guangshen Railway’s fourth-quarter operating performance signaled a 33% traffic diversion on its Guangzhou-Kowloon line, which is 10% higher than our expectation. However, the shortfall should be offset by earnings upside from a 1% value-added tax rate cut announced by Premier Li Keqiang in his annual report. Guangshen’s core operations were decent. Passenger volume on the Guangzhou-Shenzhen intercity express and long-distance lines rose 8% and 0.5%, respectively, in the fourth quart...
- Jennifer Song
Morningstar | Guangshen Is Well Positioned to Benefit From China's Rai...
Guangshen Railway is one of the key railway operators in Southern China's prosperous Guangdong province. With key assets situated in the Pearl River Delta, its operations comprise both passenger and freight and connect southern China's three largest population centres: Guangzhou, Shenzhen, and Hong Kong. Guangshen's favourable geographic location and high-quality railway assets are key strengths. While rising competition from high-speed rail poses a threat to Guangshen's profitability and compet...
- Jennifer Song
Guangshen Sees Higher Traffic Diversion on Guangzhou-Kowloon Line; VAT...
No-moat Guangshen Railway’s fourth-quarter operating performance signaled a 33% traffic diversion on its Guangzhou-Kowloon line, which is 10% higher than our expectation. However, the shortfall should be offset by earnings upside from a 1% value-added tax rate cut announced by Premier Li Keqiang in his annual report. Guangshen’s core operations were decent. Passenger volume on the Guangzhou-Shenzhen intercity express and long-distance lines rose 8% and 0.5%, respectively, in the fourth quart...
- Jennifer Song
Guangshen Is Well Positioned to Benefit From China's Railway Reform
Guangshen’s 18% year-over-year fall in net profit to CNY 310 million was within expectations, as the scheduled overhaul costs continued to weigh on margins. On a positive note, Guangshen’s gross margin recovered to 9.9% from 8.3% in the prior quarter, and with the majority of the planned overhaul completed, we expect the company’s profitability to further improve in the fourth quarter.  Core passenger operations were decent, and passenger volume on the Guangzhou-Shenzhen intercity express...
- Jennifer Song
Morningstar | Guangshen’s Weak 3Q In Line; Lowering FVE to HKD 6.30 ...
Guangshen’s 18% year-over-year fall in net profit to CNY 310 million was within expectations, as the scheduled overhaul costs continued to weigh on margins. On a positive note, Guangshen’s gross margin recovered to 9.9% from 8.3% in the prior quarter, and with the majority of the planned overhaul completed, we expect the company’s profitability to further improve in the fourth quarter.  Core passenger operations were decent, and passenger volume on the Guangzhou-Shenzhen intercity express...
- Jennifer Song
Morningstar | Guangshen’s Weak 3Q In Line; Lowering FVE to HKD 6.30 ...
Guangshen’s 18% year-over-year fall in net profit to CNY 310 million was within expectations, as the scheduled overhaul costs continued to weigh on margins. On a positive note, Guangshen’s gross margin recovered to 9.9% from 8.3% in the prior quarter, and with the majority of the planned overhaul completed, we expect the company’s profitability to further improve in the fourth quarter.  Core passenger operations were decent, and passenger volume on the Guangzhou-Shenzhen intercity express...
- Jennifer Song
Guangshen’s Weak 3Q In Line; Lowering FVE to HKD 6.30 on Weaker Frei...
Guangshen’s 18% year-over-year fall in net profit to CNY 310 million was within expectations, as the scheduled overhaul costs continued to weigh on margins. On a positive note, Guangshen’s gross margin recovered to 9.9% from 8.3% in the prior quarter, and with the majority of the planned overhaul completed, we expect the company’s profitability to further improve in the fourth quarter.  Core passenger operations were decent, and passenger volume on the Guangzhou-Shenzhen intercity express...
- Jennifer Song
Morningstar | Guangshen’s First Half In Line; It Takes a Further Ste...
Guangshen’s first-half result, with net profit rising 29% to CNY 654 million, contained little in the way of surprises and implies an 8% fall in second-quarter earnings from a year ago, as the majority of overhaul costs were booked in during the quarter. Core operations were decent, and passenger volume on the Guangzhou-Shenzhen intercity express and Guangzhou-Kowloon train rose 9.7% and 11.2%, respectively, driving revenue up by 13.4% from a year ago. With 74% of the planned overhaul complete...
- Jennifer Song
Morningstar | Guangshen’s First Half In Line; It Takes a Further Ste...
Guangshen’s first-half result, with net profit rising 29% to CNY 654 million, contained little in the way of surprises and implies an 8% fall in second-quarter earnings from a year ago, as the majority of overhaul costs were booked in during the quarter. Core operations were decent, and passenger volume on the Guangzhou-Shenzhen intercity express and Guangzhou-Kowloon train rose 9.7% and 11.2%, respectively, driving revenue up by 13.4% from a year ago. With 74% of the planned overhaul complete...
- Jennifer Song
Guangshen’s First Half In Line; It Takes a Further Step Amid Railway...
Guangshen’s first-half result, with net profit rising 29% to CNY 654 million, contained little in the way of surprises and implies an 8% fall in second-quarter earnings from a year ago, as the majority of overhaul costs were booked in during the quarter. Core operations were decent, and passenger volume on the Guangzhou-Shenzhen intercity express and Guangzhou-Kowloon train rose 9.7% and 11.2%, respectively, driving revenue up by 13.4% from a year ago. With 74% of the planned overhaul complete...
- Jennifer Song
Guangshen stands to benefit handsomely from China’s railway reform i...
Guangshen Railway’s strong first-quarter results, with net profit rising 58% year over year to CNY 446 million under PRC GAAP, were slightly ahead of our expectations, owing to lower-than-expected costs. We think this reflects stronger cost synergies amid the consolidation between Guangshen’s existing operation with the newly acquired Sanmao and Guangmeishan railway assets, which expanded its operating margin to 12.2% from 8.8% a year ago. However, the planned overhaul schedule should mean h...
- Jennifer Song
Guangshen’s Strong 1Q Slightly Beats; Eyeing Deepening Railway Refor...
Guangshen Railway’s strong first-quarter results, with net profit rising 58% year over year to CNY 446 million under PRC GAAP, were slightly ahead of our expectations, owing to lower-than-expected costs. We think this reflects stronger cost synergies amid the consolidation between Guangshen’s existing operation with the newly acquired Sanmao and Guangmeishan railway assets, which expanded its operating margin to 12.2% from 8.8% a year ago. However, the planned overhaul schedule should mean h...
- Jennifer Song
The Timing of a Trade War Couldn't Be Worse for China
China has maintained its economic rebalancing to consumption through the first quarter. But this process remains slow, as the Chinese consumer is becoming challenged with higher levels of household debt, and the picture for consumption growth is looking increasingly muddied. Despite a solid first-quarter bump, fixed-asset investment remains far below former levels. Going forward, weaker real estate and state-led infrastructure spending will likely quell any further rebound. Meanwhile, a rise in ...
- Jennifer Song
Guangshen’s 2017 Results Slightly Beat on Lower Costs; Eyeing Deepen...
No-moat Guangshen’s 2017 results, with net profit falling 12% year over year to CNY 1 billion, came in slightly above our expectations, which should mostly be attributed to lower-than-expected overhaul costs. Core operations were well on track, with full-year passenger volumes and recurring earnings remaining largely flat from a year ago. We think Guangshen’s focus on passenger railways will continue to lead to a stable growth outlook with robust cash flows for the company’s existing oper...
- Jennifer Song
Guangshen stands to benefit handsomely from China’s railway reform i...
We remain upbeat on China’s railway reform, with recent government actions indicating more comprehensive policies in 2018. We expect concrete actions to be taken over the next 12-24 months, including a one-off 25% tariff hike on conventional passenger lines, further progress in railway land development and utilization, and railway asset securitization and further deregulation. We expect these will boost Guangshen’s profitability and returns over the next five years, and we forecast the compa...
- Jennifer Song
Guangshen stands to benefit handsomely from China’s railway reform i...
We remain upbeat on China’s railway reform, with recent government actions indicating more comprehensive policies in 2018. We expect concrete actions to be taken over the next 12-24 months, including a one-off 25% tariff hike on conventional passenger lines, further progress in railway land development and utilization, and railway asset securitization and further deregulation. We expect these will boost Guangshen’s profitability and returns over the next five years, and we forecast the compa...
- Jennifer Song
Raising FVE to HKD 6.80 on Improving Profit Outlook Driven by Deepenin...
We remain upbeat on China’s railway reform, with recent government actions indicating more comprehensive policies in 2018. We expect concrete actions to be taken over the next 12-24 months, including a one-off 25% tariff hike on conventional passenger lines, further progress in railway land development and utilization, and railway asset securitization and further deregulation. We expect these will boost Guangshen’s profitability and returns over the next five years, and we forecast the compa...
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