Excerpts from OCBC Investment research report

• Outperformance vs market YTD; one of the leaders of the pack
• Infrastructure sector and other SOEs rallied after CSRC Chairman’s remarks on exploring a valuation system for undervalued SOEs
• One of few in the sector not on US Entity List

China Railway Group outperformed market year to date Given slower economic growth as China rebalances its economy, infrastructure investments are often adopted as a counter-cyclical policy. We also see renewed focus on a highway-to-railway shift for cargo transportation as China seeks to lower logistics costs and accelerate its de-carbonisation push. China Railway Group (CRG)  is a key beneficiary as one of the leading infrastructure constructors, though timing of new contracts approval could be volatile. While China‘s Belt and Road initiative could be a medium-term driver, domestic contracts remain the key driver, accounting >90% of total....