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S&P Expects CRRC Corporation Limited (01766.HK) Railway Equipment Orders Growth to Slow in 26, EBITDA to Edge Up
Recommend 4 Positive 3 Negative 2 |
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S&P Global Ratings expects CRRC Corporation Limited (01766.HK) to see a slowdown in railway equipment order growth in 26, but to maintain its cash flow level, partly attributable to improved operating efficiency. After a 10.8% increase last year, S&P estimates the company will record low single-digit growth in 26, reflecting reduced tendering activity this year following a five-year high of 278 EMU train sets tendered last year. However, new EMU orders rose significantly last year, with some orders to be delivered in 26, providing certain revenue visibility for this segment. Supported by the equipment upgrade plan under the governments 15th Five-Year Plan, replacement demand for locomotives will also receive support. In addition, driven by Chinas energy transition, demand from emerging business segments should support moderate expansion over the next one to two years. Meanwhile, S&P believes stricter cost control and improved operating efficiency will help cushion the impact of rising input costs and intense competition in new business segments. It expects the EBITDA margin to remain broadly stable in 26, with EBITDA edging up to between RMB26.5 billion and RMB27.5 billion. S&P forecasts the company will generate positive free operating cash flow in 20262027, underpinned by stable profitability, solid operating cash flow and prudent capital expenditure. After adjusted capital expenditure declines from RMB9.7 billion in 2024 to RMB8.8 billion in 2025, it is expected to continue to decrease slightly. Solid free operating cash flow will strengthen the companys net cash position over the next one to two years. (ss/w) This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. Auto-translated by AI AASTOCKS Financial News |
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