China Railway Group: Revenue and profit fell, but new contracts—especially overseas—showed strong growth

The latest Market Talks covering the Auto and Transport sector. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

0907 ET - Aumovio's obligation to compensate BMW on its brake recall last year might be a stain on the company for some investors, UBS analysts write in a note. The Continental AG spinoff went public with a $4.1 billion valuation Thursday. Although UBS analysts cut the company's valuation by 700 million euros due to the fact that parent Continental supplied the faulty parts, the analysts consider compensation a manageable risk. The two companies could find a commercial agreement that softens the hit on Aumovio, they say. Aumovio shares are up 5.3% at 40.68 euros. (aimee.look@wsj.com)

0753 ET - Tesla's pay package and capital expenditures plan for the coming years indicates it has ambitious targets for both product rollout and market cap, Baird analysts Ben Kallo and Davis Sunderland say, upgrading the stock to outperform from neutral. The Tesla board proposed a new set of product, financial and market cap milestones which are tied to a new pay package for Chief Executive Elon Musk, which the analysts see as a tool to incentivize and retain Musk for the next decade. Using those milestones, the analysts estimate shares will be $1,400 to $3,000 apiece by 2035. The analysts also see Musk's roughly $1 billion purchase of 2.6 million shares as a vote of confidence. (katherine.hamilton@wsj.com)

0739 ET - FedEx got some pushback from analysts about the feasibility of its expected 4% to 6% annual revenue growth guidance, given the anticipated $1 billion in additional costs from shifting trade policies. FedEx's revenue grew 3% in the F1Q, but Chief Customer Officer Brie Carere said that included a $280 million headwind from its partnership with the U.S. Postal Service ending. FedEx expects to get more revenue from its Amazon partnership later in the year, as it is still onboarding the e-commerce company, Carere said. Onboarding is expected to be complete by F3Q, which will boost U.S. domestic revenue growth. Fedex is up 4% premarket. (katherine.hamilton@wsj.com)

0655 ET - FedEx laid out revenue growth expectations ahead of Wall Street estimates, but Evercore ISI analyst Jonathan Chappell says uncertain trade policy will continue to limit expansion opportunities. Tariffs and the exemption of the de minimis loophole is now anticipated to hit earnings before interest and taxes by $850 million over the next three quarters, after a $150 million hit in the first quarter. The analysts see more downside risk than upside because of these expected costs, which they say will limit earnings per share growth and multiple expansion for at least the next six to nine months. Shares trade up 5% in pre-market trading. (katherine.hamilton@wsj.com)

0607 ET - China Railway Group is expected to see a recovery in growth for new orders for FY 2025, says OCBC's equity research team, pointing to the company's target of CNY2.8T for the period. OCBC says the issuance of special bonds in 2H25 and likely improved order execution are expected to support the recovery. The company also expects margins to improve through cost controls and lower financing costs. OCBC holds a buy rating on China Railway Group's stock, setting its fair value estimate at HK$5.39, with its H shares last closing at HK$3.76. (jason.chau@wsj.com)

0543 ET - Kuehne + Nagel could face challenges in the second half, and Deutsche Bank forecasts a step down in profits in the third quarter, both on year and on quarter. "We see few short-term catalysts, with earnings momentum still likely to be under pressure, volatile tariff news flow, and the risk of a recession which we think is not baked into consensus forecasts," analyst Andy Chu writes. The bank's new 2025 EBIT forecast of 1.35 billion Swiss francs is now below the low-end of recently revised full-year guidance of 1.45 billion-1.65 billion francs. The bank downgrades the shipping and transport company's stock rating to hold from buy and lowers its target price to 182 francs from 225 francs. Shares fall 7.1% to 157.40 francs. (dominic.chopping@wsj.com)

0530 ET - DHL Group's guidance looks stretched, Deutsche Bank analyst Andy Chu writes. This particularly in light of a worst case 200 million-euro hit from further changes in U.S. de minimis rules. The market backdrop is also unlikely to help DHL, with macroeconomic indicators in Europe and the U.S. flashing orange and red, in particular jobs data, Chu adds. Consumer confidence and spend is under pressure, while the implementation of tariffs and abolishment of de minimis rules in the U.S. have caused uncertainty, which is bad for freight companies, he says. Deutsche Bank downgrades DHL Group to hold from buy and lowers its target price to 42 euros from 47 euros. Shares fall 0.2% to 38.06 euros. (dominic.chopping@wsj.com)

0513 ET - Shares in container shipping companies are under pressure Friday as container freight rates on major routes out of Shanghai continue to fall. The Shanghai Containerized Freight Index has fallen over 14% in the last week, according to data published by the Shanghai Shipping Exchange. "Far East to U.S. west coast rates are now down 56% from its recent peak reached in week 23 and 61% down from week 1," analysts at JPMorgan said. Maersk shares are 5% lower, while Hapag-Lloyd shares trade 2.6% lower. Maritime research consultancy Drewry said in a note that its world container index--that tracks freight rates for 40-foot containers on eight major shipping routes--shows the major Transpacific and Asia-Europe routes are now aligned in a downwards trajectory. (dominic.chopping@wsj.com)

0353 ET - Automakers likely face persistent volatility in the near term, but third-quarter sales started relatively well in Europe and the U.S., Berenberg analysts write. Strong product-launch momentum in the second half and into 2026 and 2027 should also provide some support amid continuing pricing pressure, they add. Headwinds from existing 27.5% U.S. tariffs on European vehicles will continue weighing on margins until the 15% tariffs come into effect. A further softening in China will pressure near-term estimates. Berenberg's top picks are BMW, Ferrari and Renault. BMW remains fundamentally strong, there is upside to Ferrari consensus earnings in 2026-27 and Renault valuation remains attractive, it adds. It upgrades Stellantis stock to buy from hold and lifts its price target to 9.50 euros from 9 euros. (dominic.chopping@wsj.com)

0206 ET - ComfortDelGro is expected to deliver near-term mid-teens net profit growth, resilient cash flows and a 6.3% dividend yield in 2026, says RHB analyst Shekhar Jaiswal. The bank highlights improving UK public transport margins, capacity for new mergers and acquisitions, and stable point-to-point revenue from taxis and private hires in Singapore as share price drivers. The Singapore-based transport operator has also pre-qualified for the contract to operate the Copenhagen Metro. While the short-term earnings impact may be modest, a successful bid would mark its strategic entry into continental Europe, enhance its profile for future global tenders and diversify earnings opportunities beyond Singapore, the UK, and Australia, Jaiswal adds. RHB maintains its buy rating on ComfortDelGro with a S$1.75 target price. Shares were recently at S$1.49. (jason.chau@wsj.com)

1927 ET [Dow Jones]--FedEx doesn't believe its sales growth in the fiscal first quarter were the result of consumers trying to pull ahead of tariffs, Chief Customer Officer Brie Carere says during a call with analysts. The shipping company did get a boost in July from Amazon Prime week, which helped the company log a 3% increase in total revenue for the quarter, Carere says. But American consumers appear resilient despite trade uncertainty, which Carere sees as an indicator that their demand for shipping will continue beyond the first quarter. "We saw strong volumes in July, but I don't necessarily see that as a pull forward," Carere says. (katherine.hamilton@wsj.com)

Revenue and net profit declined year-over-year in H1 2025, but new contract value and overseas business grew. Cash flow from operations was negative, and the company maintained a strong market position with continued investment in innovation and risk management.

Original document: China Railway Group Limited Class A [601390] Interim report — Aug. 29 2025

Revenue and net profit declined year-over-year in Q1 2025, with domestic contracts down but overseas contracts up 33.4%. Gross margin and operating cash flow weakened, while property development and overseas business provided some offset.

Original document: China Railway Group Limited Class A [601390] Interim report — Apr. 29 2025

Revenue and net profit declined year-over-year, but contract backlog and overseas business grew. The company targets RMB1,132 billion in revenue and RMB2.8 trillion in new contracts for 2025, focusing on efficiency, innovation, and risk control.

Original document: China Railway Group Limited Class A [601390] Interim report — Mar. 28 2025

Revenue and net profit declined in H1 2024 due to lower infrastructure and property development performance, while contract backlog grew and emerging businesses expanded. Cash flow pressures increased, but the company maintained strong market leadership and advanced its technology and ESG initiatives.

Original document: China Railway Group Limited Class A [601390] Interim report — Aug. 30 2024