The mainland's railway companies were among the worst performers of the stock market yesterday following unsatisfactory third-quarter results.
The share price of China Railway Group fell 14 per cent to HK$2.63, while that of China Railway Construction Corporation (CRCC) was down 11.7 per cent to HK$4.70. CSR Corporation lost 10.1 per cent to end the day at HK$4.70.
Although China Railway's 48.6 per cent drop in net profit to 1.14 billion yuan (HK$1.38 billion) during the third quarter was in line with market expectations, the poor market sentiment towards the industry has been dragging stocks down, said Guotai Junan Securities analyst Gary Wong.
As of September 30, the state-owned firm's loss from a highway construction project in Poland stood at 644 million yuan (. Recently, a Polish court ordered China Railway and two other companies to pay US$41.3 million over an aborted highway project.
State-owned CRCC did better as it swung into the black with a net profit of 1.35 billion yuan in the third quarter, against a 1.35 billion yuan net loss for the same period last year.
'If you exclude the loss in the third quarter last year, CRCC's results don't look that good. The market fears heavy risks,' Wong said.