What’s new: CRRC Corp. Ltd., China’s state-owned rolling stock manufacturer, reported a 23% drop in net income for the first half of this year, amid modest growth in Beijing’s railway infrastructure spending.
During the six months through June, the world’s largest rolling stock company reported net profit of 3.7 billion yuan ($539 million) on revenue of 89.4 billion yuan. Its revenue also saw a year-on-year drop of 7%, according to latest earnings report from the company, which is listed in both Shanghai and Hong Kong.
The background: CRRC made most of its money from selling railway equipment such as locomotives and passenger carriages. Its largest client is China State Railway Group Co. Ltd., the country’s dominant railway operator, which contributed 41% of its revenue over the period.
For the first half of this year, China’s railway-related spending rose 1% to 307.6 billion yuan, according to official statistics released previously. The majority of the increase came from spending on infrastructure, such as building new rail routes. Of the total, about 20% — or 62.5 billion yuan — went to procurement spending including equipment, a drop of 8.68% from the same period last year.
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Contact reporter Mo Yelin (yelinmo@caixin.com)
