Changes in Hong Kong stocks | China Railway (00390) fell by more than 4%, leading the decline in infrastructure stocks, construction companies' revenue and profits in the third quarter will still show some pressure

The Zhitong Finance App learned that infrastructure stocks continued to decline. As of press release, China Railway (00390) fell 4.03% to HK$3.81; China Railway Construction (01186) fell 4.01% to HK$5.51; CRRC (01766) fell 2.95% to HK$4.94; and China Communications Construction (01800) fell 2.5% to HK$5.06.

Shen Wan Hongyuan pointed out that traditional infrastructure investment data is still under pressure, and the shift in central policy is expected to drive investment flexibility; the pace of local government investment is slowing down, and superimposed enterprises are pursuing project quality. It is expected that the revenue and profits of enterprises will continue the trend in the first half of the year 2024Q1-3, and will still show some pressure.

CITIC Securities published a research report saying that construction companies, as the main implementers of local government infrastructure projects, were affected by chemical bonds and financial pressure in the past. Their income statements and balance sheets continued to be affected, and some indicators reached new lows in recent years. With fiscal strength and the opening of debt, it is expected to drive construction companies' statements to continue to be repaired in the short term, leading to a recovery in industry demand from the bottom in the medium to long term. CITIC Securities suggests focusing on the two main lines of key bonded regional enterprises+long-term liquidated enterprises. In terms of flexibility, enterprises with higher short-term “receivable assets/market value” may have more room for valuation repair.