China Railway Construction Rises Most in Six Weeks After Winning Contracts
By Bloomberg News - Aug 18, 2010 9:07 PM PT
China Railway Construction Corp., the world’s biggest listed heavy-construction company, jumped the most in six weeks in Hong Kong trading after announcing contracts worth a combined 21.5 billion yuan ($3.2 billion).
The builder climbed as much as 3.4 percent to HK$10.48, the biggest intraday gain since July 6, and traded at HK$10.42 at 12:01 p.m. The company won contracts for nine railroad projects in China, it said in a statement yesterday.
The railway builder is likely to boost earnings 26 percent a year through 2012 as it pushes into new markets overseas, Morgan Stanley said today. China, which overtook Japan in the second quarter to be the world’s second biggest economy, will also spend 700 billion yuan building high-speed railroads across the nation this year to meet transport demand.
China Railway Construction “is leveraging its global edge and strong balance sheet to accelerate its diversification,” Kate Zhu, an analyst at Morgan Stanley Asia Ltd., said in a report as she began coverage with an “overweight” rating.
The builder will likely report a 50 percent jump in first- half earnings, she said.
“We expect near-term catalysts from upbeat interim results,” she said. The company is pushing into overseas engineering and construction projects, as well as more capital- intense infrastructure operations, property and overseas mining, she said.
In Shanghai, the company rose as much as 1.1 percent to 7.51 yuan. The builder is due to report first-half earnings on Aug. 30, according to data compiled by Bloomberg.
--Li Xiaowei. Editors: Garry Smith, Neil Denslow
