智通财经网·2025-12-24 01:26Core Viewpoint - The report from Shenwan Hongyuan initiates coverage on China Railway Group (00390) with a "Buy" rating, indicating that infrastructure investment is expected to remain stable in 2026 due to local government debt management and central government projects support [1] Group 1: Industry Investment Outlook - Fixed asset investment growth has slowed this year, with pressures in infrastructure, manufacturing, and real estate; however, investment is expected to stabilize in 2026 due to orderly local government debt management and the implementation of central government projects [1] - Certain sub-sectors are anticipated to gain higher investment elasticity aligned with national strategies [1] Group 2: New Orders and Growth - The company has seen marginal improvement in new signed contracts, with cumulative new contracts from 2021 to 2025Q1-3 amounting to 27.3 trillion, 30.3 trillion, 31.0 trillion, 27.2 trillion, and 15.8 trillion respectively, reflecting year-on-year changes of +4.7%, +11.1%, +2.2%, -12.4%, and +3.7% [2] - The backlog of contracts stands at 75.4 trillion, ensuring long-term stable growth for the company [2] Group 3: Resource Sector Performance - The resource utilization business, primarily focused on mining operations, has shown strong performance, with revenue from mineral resources for 2021-2024 and 2025Q1-3 recorded at 5.957 billion, 7.504 billion, 8.367 billion, 8.157 billion, and 6.223 billion respectively, with year-on-year growth rates of +50.97%, +25.98%, +11.49%, -2.52%, and +8.04% [3] - The gross margin for the resource utilization segment in 2025Q1-3 was 59.45%, supporting the company's operating profit [3] Group 4: Valuation and Dividend Appeal - The company has implemented a "Valuation Enhancement Plan" to improve quality and increase investor returns; as of December 23, 2025, the A-share PE (TTM) and PB valuations were 5.4X and 0.42X, while H-share valuations were 3.6X and 0.30X, indicating a significant discount for H-shares compared to A-shares [4] - Cash dividends from 2021 to 2024 and 2025H1 were 4.85 billion, 5.00 billion, 5.20 billion, 4.40 billion, and 2.02 billion, representing 17.5%, 15.8%, 15.5%, 15.8%, and 17.1% of the respective net profits; the dividend yield for H-shares is 5.1% [4]