09 April 2015

[090415.EN.BIZ] China's Trainmakers Make Record Profits From Deals at Home and Abroad

CHINA's top trainmaker China CNR Corp Ltd's posted a 33 per cent year-on-year increase in net profit to CNY5.5 billion (US$886.2 million) in 2014 while CSR Corp's net profit increased 27.6 per cent to CNY5.3 billion.

Both companies' net profit growth marked the fastest pace since 2011, according to Reuters, which provided no corresponding revenue figures.

Rail builder China Railway Construction's Corp Ltd (CRCC) 2014 net profit increased 9.65 per cent to CNY11.3 billion, while China Railway Group (CRG) net profit was up 10.5 per cent to CNY10.4 billion.

"The railway market is generally growing, but market competition is becoming fierce," CNR said in a filing on the Hong Kong stock exchange. "The company faces dual pressure from domestic competitors and international corporations."

Chinese trainmakers exported CNY26.77 billion in equipment in 2014, up 22.6 per cent year on year, while the country's project contractors signed US$24.7 billion in contracts worldwide, according to customs data.

Deals included a US$567 million contract in October by CNR to supply trains to Boston, Massachusetts, which was a first Sino-US rail equipment deal.

Beijing is in the midst of merging CNR and CSR into an enlarged firm able to compete globally with Germany's Siemens and Canada's Bombardier to sell high-speed rail technology.

But China has encountered snags in Mexico where the government cancelled the tender for a $3.75 billion high-speed rail tender but Beijing plans to spend a further CNY800 billion on domestic rail lines this year.

Source : HKSG.

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