Goldman Cuts CRRC, Times Electric Targets on Margin Pressure

Edgen Stock

·Mar 30 2026, 08:06

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Key Takeaways

Goldman Sachs has revised its outlook on Chinese industrial giants CRRC and Zhuzhou CRRC Times Electric, lowering price targets due to a mix of domestic market weakness and increasing competition. While CRRC benefits from overseas growth, its domestic railway business faces headwinds. Times Electric is seeing pressure on margins despite growth in new energy sectors, with the bank forecasting moderate growth for both companies.

CRRC Target Price Cut: Goldman reduced its target for CRRC's H-shares to HKD6.2 from HKD6.5, citing an expected slowdown in the domestic railway and urban rail segments.
Times Electric Margin Pressure: The bank lowered its target for Zhuzhou CRRC Times Electric's H-shares to HKD40.7 from HKD43.9, anticipating that intense price competition will squeeze profit margins.
Divergent Business Outlook: Strong overseas orders for CRRC are expected to be offset by domestic weakness, while Times Electric's revenue growth in emerging industries faces profitability challenges from new capacity costs.

Goldman Sachs trimmed its price target for CRRC's Hong Kong-listed shares to HKD6.2 from HKD6.5, though it maintained a "Buy" rating. The firm also cut the target for CRRC's A-shares to RMB5.6 from RMB5.9, keeping a "Neutral" rating. The adjustments stem from a forecast of moderate growth, where strong momentum in overseas business is expected to be offset by headwinds in China's domestic railway and urban rail sectors. Reflecting this outlook, Goldman lowered its earnings per share (EPS) forecasts for CRRC by up to 5% for the period from 2026 to 2030.

Times Electric Target Cut to HKD40.7 on Margin Pressure

For subsidiary Zhuzhou CRRC Times Electric, Goldman reduced the H-share price target to HKD40.7 from HKD43.9 and the A-share target to RMB55.6 from RMB59.3, maintaining a "Neutral" rating on both. The bank projects that intensified price competition and the initial costs of new Insulated-Gate Bipolar Transistor (IGBT) manufacturing capacity will pressure the company's profit margins. Consequently, Goldman reduced its EPS forecasts for Times Electric by up to 4% for 2026 through 2030.

Despite the margin concerns, Times Electric's push into emerging industries continues to drive revenue. The company was recently selected as a key supplier for China Huaneng Group's 10 GW solar inverter procurement framework. This win highlights its growing presence in the new energy sector, supporting Goldman's analysis that emerging business lines will be a primary source of growth, even as profitability remains a key challenge for investors to monitor.

Goldman Lowers CRRC's H-Share Target to HKD6.2

Times Electric Target Cut to HKD40.7 on Margin Pressure