China Railway Group Limited (0390.HK) stock analysis

In our weekly check, China Railway Group Limited is graded D (A to F). Of 25 checks on debt, profit, cash flow and trend: 11 pass, warnings: 4, red flags: 10.

About China Railway Group Limited

China Railway Group Limited is an Industrials company (Engineering & Construction) based in China, listed on HKSE as 0390.HK.

What our checks show for 0390.HK

Red flags

• Net debt is 6.6x a year of EBITDA (debt/equity 2.35). That limits room in a downturn and raises refinancing risk.
• The net margin fell by 0.9 points over 5 years, to 1.7%: the company keeps less of each sale as profit.
• Revenue fell 3.6% a year over the last 3 years.
• The net margin is only 1.7%: little room if costs rise.
• Free cash flow is negative (-5% of revenue): the business spends more cash than it brings in.
• The dividend takes 131% of profit: little cushion if profit falls.
• The stock has fallen as much as 88% from a peak. Would you have held through that?
• Recovering from its deepest fall took about 3.4 years.
• Return on capital (ROCE) is only 3.8%.
• Pay in shares equals 0% of free cash flow: it dilutes shareholders.

Warning signs

• Operating profit covers interest only 2.6 times: a weak year could make the payments hard.
• The gross margin fell by 0.6 points, to 9.6%: costs are rising faster than prices.
• Earnings per share fell 24.3% a year over the last 3 years.
• Net profit fell 17.1% a year over the last 3 years.

Strengths

• Analysts expect earnings per share to grow about 26.2% a year over the next years.
• The price is 6 times earnings (P/E), reasonable for its growth.
• A large company: market value $13.91 billion.
• Beta 0.38: the stock usually moves less than the market.
• Actively traded: about 21 million shares a day.

Similar companies

SKA-B.ST · PWR · 6139.TW · 601668.SS · DG.PA

Questions

What grade does China Railway Group Limited (0390.HK) have?

In our weekly check, China Railway Group Limited is graded D (A to F). Of 25 checks on debt, profit, cash flow and trend: 11 pass, warnings: 4, red flags: 10. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of 0390.HK stock?

This week's biggest flags for China Railway Group Limited: High debt, Margins falling, Weak revenue growth. In total 14 of 25 checks show a warning or a red flag.

What does China Railway Group Limited do?

China Railway Group Limited is an Industrials company (Engineering & Construction) based in China, listed on HKSE as 0390.HK.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-10-31

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