CREC: 2026Q1 Earnings

The following is a summary of China Railway Group (CREC)’s 2026 first-quarter financial report:

Unit: RMB

Item	Q1 2026 Amount	YoY Change
Operating Revenue	234.998 Billion	-5.46%
Net Profit Attributable to Shareholders	4.359 Billion	-27.65%
Net Profit Excluding Non-recurring Items	3.892 Billion	-29.91%
Basic Earnings Per Share (EPS)	0.177 Yuan/share	-27.76%

Overall Gross Profit Margin: 8.12% for the quarter, a decrease of 0.49 percentage points compared to the same period last year.
New Contracts Signed: The total value of new contracts signed in Q1 2026 was 338.51 billion RMB, down 39.6% year-on-year.
- Domestic Business: 305.73 billion RMB, down 38.2% YoY.
- Overseas Business: 32.78 billion RMB, down 50.1% YoY.
Segment Highlight: Against the backdrop of an overall decline in revenue, the equipment manufacturing business performed relatively steadily, with operating revenue increasing by 7.46% year-on-year.

Regarding the recent performance, outlook, and EPS forecast for China Railway Group (CREC, 00390.HK), the analysis is summarized as follows:

In the first quarter of 2026, China Railway Group faced significant business pressure, primarily reflected in the following areas:

Significant Contraction in New Contracts: The value of new contracts signed this quarter dropped sharply by 39.6% year-on-year, with domestic and overseas businesses declining by 38.2% and 50.1%, respectively. This reflects a general slowdown in demand for infrastructure construction and cyclical challenges in securing new projects.
Limited Profitability: Impacted by the declining gross profit margins of infrastructure projects, the company saw a significant retreat in net profit. Both total revenue and net profit showed negative growth, leading the market to maintain a cautious stance on the company’s short-term profitability.
Macroeconomic Impact: Although fixed-asset investment in China’s railway sector maintained steady growth of 2.6% in the first five months of this year, the weakness in real estate investment (down 11.2% year-on-year) continues to drag on the construction industry, offsetting the positive effects of infrastructure investment.

Looking ahead to the second quarter, the market is focusing on the following indicators:

Effectiveness of Policy Implementation: The Chinese government has emphasized driving infrastructure construction through front-loaded fiscal policies. The pace of progress on key projects and the actual deployment of investment over the coming months will be key to determining whether the company’s performance can stabilize and recover.
Performance of Structural Transformation: With traditional infrastructure growth constrained, the company’s growth in the “high-tech manufacturing” segment (such as equipment manufacturing) will be a critical observation point. If this segment can sustain its growth, it will help smooth out the volatility of overall performance.
Market Expectations: Given the weak first-quarter results, the market expects performance in the second quarter to remain highly uncertain. It will be important to observe whether there is a significant seasonal rebound in new contract signings.

Based on earnings forecasts for China Railway Group in 2026 from market analysis institutions (such as Fintel and other data platforms):

Trend: Market analysts hold a cautious and wait-and-see attitude toward China Railway’s future earnings, reflecting the headwinds currently faced by the construction industry.
EPS/Target Price Reference: Currently, the average analyst target price for China Railway over the next year is approximately 5.48 HKD, with a range between 4.38 and 6.28 HKD.
Risk Warning: Please note the distinction from the US-listed Creative Realities (CREX). CREX is a technology company unrelated to infrastructure, and its recent financial performance has been poor; please do not confuse its financial data with that of China Railway Group.

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