HK Stock Market Move | China Railway (00390) falls more than 3% as first-quarter performance is dragged down by a decline in infrastructure gross margin, along with a simultaneous contraction of new contracts at home and abroad.

China Railway (00390) fell more than 3%, dropping 3.15% to HK$3.69 at the time of writing with a trading volume of HK$176 million. On the news front, China Railway recently released its financial report for 26Q1. According to a Changjiang research report, the company achieved operating income of RMB 234.998 billion in 26Q1, a decrease of 5.46% year-on-year. Net profit attributable to the company was RMB 4.359 billion, a decrease of 27.65% year-on-year, while non-recurring net profit attributable was RMB 3.892 billion, a decrease of 29.91% year-on-year. The comprehensive gross profit margin for 26Q1 was 7.93%, a decrease of 0.53 percentage points year-on-year, mainly due to the decline in construction gross profit; the infrastructure construction business gross profit margin was 6.74%, a decrease of 0.40 percentage points year-on-year. The bank continued to point out that the company's new contract value in the first quarter of 2026 was RMB 338.51 billion, a decrease of 39.6% year-on-year, and overall business development faced pressure. Among them, the domestic new contract value was RMB 305.73 billion (-38.2%), and the overseas new contract value was RMB 32.78 billion (-50.1%), with simultaneous contraction in domestic and foreign markets. In terms of business structure, the engineering construction business was the main drag, with a new contract value of RMB 234.23 billion, a significant decrease of 44.4% year-on-year, while asset management was RMB 14.63 billion (-45.7%) and emerging business was RMB 45.11 billion (-37.5%), both showing obvious contraction.