By Justina Lee


Shares of China Railway Group Ltd. rose in early trading Friday after the company said that the value of new contracts in the first quarter rose 84%.

Shares gained as much as 8.6% to 5.05 Hong Kong dollars (64 U.S. cents) Friday morning, on track for their biggest one-day rise in nearly two years, after the company said late Thursday that the value of new contracts in the first three months of the year rose to 605.74 billion yuan (US$95.23 billion).

Contracts in China rose 82% on year, while overseas contracts more than doubled, it said.

Citi analysts Eric Lau and Alice Cai said the jump was "impressive," in a research note, and it beat market expectations. They expect the company's first-half order growth to expand by 50%-60% compared with the same period last year.

Citi maintained a buy rating on China Railway "on distressed valuation" with a price-to-earnings ratio of about 3.5, as well as the company's better-than-5% dividend yield this year and new policies aimed at boosting GDP growth in China. It kept a HK$6.70 target price on the stock.

China Railway said last month in its earnings release that it expects the value of new contracts to be about CNY2.930 trillion for the full year.


Write to Justina Lee at justina.lee@wsj.com


(END) Dow Jones Newswires

04-07-22 2258ET