news flash·2025-05-06 05:59Core Viewpoint - UBS has lowered the target price for China Railway Group (00390.HK) to HKD 4.2, while maintaining the company's full-year guidance unchanged [1] Financial Performance - In the first quarter of this year, China Railway Group's revenue and net profit decreased by 6% and 23% year-on-year, respectively [1] - Overall new contracts fell by 10% year-on-year, primarily due to limited growth potential in traditional sectors and the real estate industry still being at a low point [1] Strategic Shift - The company is proactively changing its strategy to focus on quality over scale expansion [1] - A highlight for the company is the 33% year-on-year increase in overseas new contracts, benefiting from significant growth in the real estate and railway projects in Asia and Africa [1] Management Guidance - The management has not altered the full-year guidance, projecting a 3.1% year-on-year increase in new contracts and a 2.4% year-on-year decline in revenue [1] - Management believes that revenue recognition and order intake accelerated in April [1] Earnings Forecast - UBS has reduced its earnings per share forecast for the company by 12% to 15% for the years 2023 to 2027 [1] - The target price has been cut by 12% from HKD 4.8 to HKD 4.2, while maintaining a buy rating [1]