China Railway Construction Posts 1st-Quarter Profit

China Railway Construction Corp. (1186), builder of more than half the nation's railroads, said first- quarter profit was 705.9 million yuan ($101 million).

Profit was 0.079 yuan a share, the company said in a statement to the Shanghai stock exchange today, without giving year-earlier numbers. China Railway Construction reported sales of 32.9 billion yuan for the quarter ended March 31.

China Railway Construction's 2007 full-year profit beat the company's projections after it benefited from a state initiative to spend as much as $800 billion on railways, roads and waterways through 2020. The results are the first the company has announced since raising about $5.8 billion in initial share sales in Shanghai and Hong Kong.

Larger rival China Railway Group Ltd. (390) said on April 24 its full-year profit almost doubled to 3.16 billion yuan. The two companies, which each control about half of China's railway- building market, are helping the nation expand its rail network, which meets about 40 percent of demand, causing bottlenecks.

Full-Year Earnings

China Railway Construction's full-year net income based on mainland China accounting standards reached 3.14 billion yuan, higher than the 3.11 billion yuan projected in share-sale documents. The company yesterday reported 2007 profit of 2.31 billion yuan based on international accounting standards, compared with its projection of 2.26 billion yuan.

Full-year net income in 2006 was 2.01 billion yuan based on domestic accounting standards, and 1.5 billion yuan based on international standards, according to the share-sale documents.

China Railway Construction raised 22.2 billion yuan in February in Shanghai and HK$18.3 billion ($2.3 billion) in Hong Kong in initial public offerings. On April 1, it exercised an option to allocate more stock in Hong Kong for an additional HK$1.94 billion.

Shares of China Railway Construction gained 1.7 percent to HK$11.88 in Hong Kong as of 10:53 a.m. The shares have gained 11 percent since their March 12 debut, compared with a 10.5 percent advance in the Hang Seng China Enterprises Index (HSCEI), which tracks shares of mainland companies listed in Hong Kong.

To contact the reporter on this story: Lee Spears in Beijing at lspears2@bloomberg.net.

To contact the editor responsible for this story: Teo Chian Wei at cwteo@bloomberg.net.

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