Skip Navigation Links
My investment in China Railway
13 Jan 2021 (102 views)

I bought 150,000 of China Railway (0390.HK) stock at an average cost of HK 3.56 during the past two months. 

The stock had a low price earning ratio of about 3.6 times and a dividend yield above 5%. The price in HK exchange showed a big discount of 43% compared to the price in Shanghai.

I am not sure how competitive is the market for the building of railways in China. I guess that there are probably more jobs that construction companies, so the demand exceed supply. I also guess that the margin is attractive. 

The price dropped slightly after I bought them and did not move much for more than a month. I held on to the stock for its attractive dividend yield and low PE ratio.

The price was at $3.35 on 4 January 2021. Over 10 days, it increased 14% to $3.85. I expect it to move up further. 

I like to invest in good stocks that are under valued and hold them for a few months or years, until it recover to its underlying value. 

There was an article in the South China Morning Post in Hong Kong that China will be spending less on railway construction in future and will move the development efforts to other sectors of the economy. The impact of this policy change will probably take a few years to manifest. In the meantime, this stock should represent good value.




 


My investment in China Railway
[Back] [Print]


I bought 150,000 of China Railway (0390.HK) stock at an average cost of HK 3.56 during the past two months. 

The stock had a low price earning ratio of about 3.6 times and a dividend yield above 5%. The price in HK exchange showed a big discount of 43% compared to the price in Shanghai.

I am not sure how competitive is the market for the building of railways in China. I guess that there are probably more jobs that construction companies, so the demand exceed supply. I also guess that the margin is attractive. 

The price dropped slightly after I bought them and did not move much for more than a month. I held on to the stock for its attractive dividend yield and low PE ratio.

The price was at $3.35 on 4 January 2021. Over 10 days, it increased 14% to $3.85. I expect it to move up further. 

I like to invest in good stocks that are under valued and hold them for a few months or years, until it recover to its underlying value. 

There was an article in the South China Morning Post in Hong Kong that China will be spending less on railway construction in future and will move the development efforts to other sectors of the economy. The impact of this policy change will probably take a few years to manifest. In the meantime, this stock should represent good value.