The net profit decline at China Railway Group last year was far worse than analysts feared, but China Railway and China Railway Construction Corp (CRCC) enjoyed double-digit growth in revenue and orders thanks to the country's stimulus package. The two state-owned firms control nearly all of China's rail construction market. Net profit at China Railway fell 45.7 per cent to 1.35 billion yuan (HK$1.53 billion) last year despite a 26.9 per cent rise in revenue to 225.03 billion yuan. Revenue soared 70.9 per cent to 60.11 billion yuan in the first quarter, while net profit jumped 86.6 per cent to 982.31 million yuan. The Hong Kong and Shanghai-listed firm's net profit in 2008 was much worse than the Bloomberg consensus of 1.53 billion yuan. The drop in net profit was mainly due to a 4.14 billion yuan foreign-exchange loss in its H-share IPO proceeds. The value of new contracts signed by China Railway last year soared 72.4 per cent to 428.5 billion yuan, of which 230.3 billion yuan came from rail construction projects. For this year, China Railway said it plans to achieve revenue of 278.4 billion yuan, 18.7 per cent more than last year. 'The ongoing global economic crisis has posed a severe challenge to any further effort by the company to expand its overseas business and also has an impact on the company's new businesses in property and mining,' said China Railway chairman Shi Dahua. CRCC's revenue soared 56 per cent to 51.33 billion yuan in the first quarter, while its net profit grew 33.9 per cent to 944.84 million. The Hong Kong-listed firm's net profit for last year rose 58.4 per cent to 3.64 billion, while revenue grew 27.6 per cent to 219.41 billion yuan. Net profit beat the Bloomberg consensus of 3.62 billion yuan. The value of CRCC's new contracts grew 47.4 per cent to 423.1 billion yuan last year. New railway construction contracts leapt 212.6 per cent to 254.1 billion yuan. 'The central government has decided to use infrastructure for expanding internal demand and maintaining growth. The unprecedented investment scale has offered a historical opportunity rarely seen in 100 years,' said CRCC chairman Li Guorui. The Ministry of Railways plans to nearly double spending on railways from 330 billion yuan last year to 600 billion yuan this year. As part of the 4 trillion yuan stimulus to counter the economic crisis, the government increased its target for railways in the country to 120,000 kilometres by 2020 from 100,000 km.