HONG KONG -- Shares in Chinese train manufacturer CRRC jumped Monday in Hong Kong as investors welcomed the announcement of expansion plans in Europe and Australia.
The stock hit a two-month high of 7.44 Hong Kong dollars, up HK$0.39, or 5.53%, from Friday, a level last seen on Sept. 23. It closed at HK$7.39, up HK$0.34 or 4.82%.
CRRC shares were also buoyant on the Shanghai Stock Exchange, ending up 2.09% from Friday.
After Friday's close, CRRC said a joint venture between subsidiary CRRC Changchun Railway Vehicles and an Australian company has won an order from state of Victoria to supply subway trains. The Chinese company will take a 45% slice of the 2 billion Australian dollar (US$1.49 billion) project. It will build 65 trains over the next six years. CRRC will be responsible for design, manufacturing and testing of the rolling stock. In addition, it will invest to A$15 million in the joint venture, holding 10% stake in the joint-venture company.
Also, on Sunday, CRRC announced that its subsidiary CRRC Zhuzhou Locomotive is planning to buy Skoda Transportation, a Czech rival.
CRRC is benefiting from the yuan's fall against the U.S. dollar. Foreign orders for rolling stock lift the company's dollar revenues, boosting the company's profit in yuan terms.
Meanwhile, the Chinese government on Monday unveiled a revised plan to link Beijing to the neighboring city of Tianjin by rail as part of its ambition to boost infrastructure investment. Expectations are high for railway issues, including CRRC, thanks to growing demand both at home and abroad.