- Board approves $100 million investment in U.S. factory
- Hong Kong-listed shares decline most in more than two months
China’s only maker of high-speed locomotives reported a 2 percent gain in first-half profit, trailing analysts’ estimates, as Asia’s biggest economy expanded its rail network. Shares slumped in Hong Kong and Shanghai.
CRRC Corp. had net income of 4.79 billion yuan ($720 million), compared with with the 4.83 billion-yuan average profit estimate in a Bloomberg survey of three analysts. Sales totaled 94.2 billion yuan, ahead of the 93.4 billion-yuan projection. CRRC’s board approved investing $100 million in a U.S. production plant, the company said Monday.
Shares dropped 4.2 percent to HK$6.93, the biggest loss since June 10. In Shanghai, the stock slipped 1 percent to 9.40 yuan, extending this year’s decline to 26 percent.
The Chinese government combined former trainmakers CSR Corp. and China CNR Corp. to form CRRC, in a bid to better compete with Germany’s Siemens AG and France’s Alstom SA. Home to the world’s biggest high-speed rail network, China has identified the sector as one of 10 focus industries in a blueprint for economic development.
Premier Li Keqiang is leading the overseas push by train equipment makers as part of the government’s strategy to turn China into an advanced industrial nation. They have targeted emerging markets in Africa, Latin America and Southeast Asia for rail-related orders, while also bidding for high-profile contracts in the developed world.
On Saturday, CRRC announced its first joint venture plant in India started operations, the company’s first plant in South Asia, Xinhua reported. The venture -- CRRC Pioneer (India) Electric Co. -- is 51 percent owned by the Chinese firm. The venture will repair and manufacture railway locomotive engines, Xinhua said.