Citi released a report stating that China Railway (00390.HK) had slightly lower-than-expected third-quarter performance due to the slowing project initiation speed, leading to a downward revision of its earnings per share forecast for 2024 to 2026 by about 9%. The bank has lowered China Railway's target price from 5.3 yuan to 5.1 yuan and maintains a "buy" rating.

Citi stated that China Railway faces challenges in operating cash flow, with a net cash outflow of 71.257 billion yuan in the first 9 months of this year. Although the fourth quarter is a peak season for cash inflow, the company may not achieve positive cash flow by the end of this year. On the other hand, the stimulus measures to be introduced in the mainland may solve local government debt issues, benefiting China Railway by reducing accounts receivable risks and accelerating project initiation. However, China State Construction Engineering Corporation (03311.HK) is even more bullish in the industry.