Broker: CGS International
Date of Report: July 23, 2025

China Railway Group and Aztech Global: Bullish Momentum and Earnings Surprises Drive Market Optimism – Key Insights for Investors

Market Overview: Tech Titans Anchor Global Equity Momentum

Wall Street remains on a high, with the S&P 500 sustaining all-time highs as the highly anticipated megacap earnings season kicks off. Investor sentiment is buoyed by anticipation around artificial intelligence advancements, which continue to underpin earnings growth for the market’s largest technology firms. While the index itself showed minimal movement overnight, more than 400 of its constituent companies posted gains. Notably, tech giants Tesla and Alphabet saw advances ahead of their results, and D.R. Horton led a rally in homebuilders. Meanwhile, Kohl’s Corp. experienced a surge reminiscent of the meme stock era, with shares spiking as much as 105% before settling at a 38% gain. However, Texas Instruments disappointed investors with a downbeat forecast after hours.

The so-called “Magnificent Seven” technology firms are expected to post a combined 14% rise in second-quarter profits, while the rest of the S&P 500 is forecasted to show flat earnings. With AI-driven names increasingly critical to market health, their performance remains a barometer for broader tech sector growth. On the international stage, US-Philippines trade talks produced a new 19% tariff agreement, and Canada’s leadership is seeking to stabilize US ties amid ongoing negotiations.

Aztech Global Ltd: Earnings Recovery Signals Gradual Turnaround

Singapore-listed Aztech Global Ltd delivered a mixed set of results for 1H25, showing both challenges and early signs of recovery:

• 1H25 Revenue: S\$185.4 million, down 50.3% year-over-year.
• 1H25 Net Profit: S\$16.1 million, dropping 65.5% year-over-year as customer orders dwindled.
• Sequential Quarterly Improvement: Revenue surged 241.4% quarter-on-quarter to S\$143.4 million, driving a remarkable 873.3% quarter-on-quarter increase in net profit to S\$14.6 million.
• Beating Expectations: Both revenue and net profit for the first half were above internal and consensus forecasts.
• Dividend: Interim dividend of 1.0 Singapore cent per share announced, representing approximately a 48% payout ratio, payable on August 6, 2025.
• Outlook: While macroeconomic challenges persist, Aztech has been upgraded to ‘Hold’ from previous ratings, as the company appears to be in the early stages of order recovery.

Key Table: Aztech Global Ltd 1H25 Financial Highlights

Despite headwinds, Aztech’s sharp quarterly rebound suggests a potential turning point as new orders begin to flow in, positioning the company for a gradual path to recovery in the upcoming quarters.

China Railway Group Ltd (HKG: 390): Bullish Technical Breakout Points to Significant Upside

China Railway Group Ltd has re-emerged as a technical leader on the Hong Kong market, with multiple indicators supporting a bullish outlook:

• Last Price: HK\$4.16
• Key Entry Levels: HK\$4.16, HK\$3.83, HK\$3.70
• Support Levels: HK\$3.91 (Support 1), HK\$3.22 (Support 2)
• Stop Loss: HK\$3.50
• Resistance Levels: HK\$4.87 (Resistance 1), HK\$6.00 (Resistance 2)
• Target Prices: HK\$4.80, HK\$6.00, HK\$7.00, HK\$9.00

Technical Analysis: Bullish Momentum Confirmed

• Stock has broken out of a prolonged downtrend channel, signaling potential for continued bullish movement.
• Prices have held above a critical bullish gap support zone for three consecutive periods, indicating robust buying momentum.
• Ichimoku analysis delivers a strong bullish signal.
• MACD histogram is positive, with both the MACD and signal lines rising firmly above the zero line.
• Stochastic Oscillator continues to climb, underscoring sustained upward momentum.
• The 23-period Rate of Change (ROC) is positive and trending higher.
• Directional Movement Index reflects growing bullish strength.
• Volume expansion is robust and healthy, further confirming the uptrend.

Company Overview: China Railway Group Ltd

China Railway Group Limited operates as a leading provider of transportation facility construction services, including the building of railways, roads, tunnels, and bridges. The company also engages in engineering surveys, equipment manufacturing, real estate development, and investment activities.

Key Technical Table: China Railway Group Ltd Trading Parameters

Given the strong technical signals and healthy volume expansion, investors may find China Railway Group Ltd well-positioned for further upside in the coming months.

Key Takeaways for Investors

• Tech Sector’s Leadership: The performance of AI-driven giants continues to drive the broader market, with the Magnificent Seven expected to deliver double-digit profit growth this quarter.
• Aztech Global’s Resilience: Despite significant year-over-year declines, the company’s robust quarterly rebound and above-expected earnings suggest an early-stage recovery is underway, supporting the case for a ‘Hold’ rating.
• China Railway Group’s Technical Strength: Multiple bullish indicators and strong volume expansion position the stock for attractive upside, with technical targets as high as HK\$9.00.
• Macro Environment: Ongoing tariff developments and global trade negotiations remain key watchpoints for market participants, but the focus remains squarely on earnings and technical momentum in the near term.

CGS International’s Investment Rating Framework

• Add: Expected total return (price appreciation plus dividend yield) to exceed 10% over the next 12 months.
• Hold: Expected total return between 0% and 10% over the next 12 months.
• Reduce: Expected total return below 0% over the next 12 months.

Sector and country ratings are similarly structured as Overweight, Neutral, or Underweight depending on market cap-weighted recommendations and desired benchmark exposure.

Conclusion: Opportunities Amid a Resilient Market Landscape

As megacap earnings season unfolds, investors should remain vigilant for both fundamental and technical signals. Aztech Global’s earnings surprise and China Railway Group’s bullish breakout offer compelling case studies for those seeking opportunity in a dynamic market. With clear technical support and improving order books, these companies warrant close attention from equity investors and market strategists alike.