According to the report released by Shenwan Hongyuan, based on data from the China State Railway Group, the total fixed asset investment in national railways from January to May reached 242.1 billion yuan, a year-on-year increase of 5.9%. From the perspective of new demand, the &#34;14th Five-Year Plan&#34; for the development of a modern comprehensive transportation system proposes that by 2025, the national railway operating mileage will reach 165,000 kilometers, of which the operating mileage of high-speed rail will reach 50,000 kilometers. Compared to 2024, at least 3,000 kilometers of new railway lines will be put into operation in 2025, including at least 2,000 kilometers of high-speed rail. From the perspective of updating and maintaining, the maintenance and updating cycles for high-speed trains, locomotives, signaling equipment, etc., have all entered, further enhancing the certainty of demand on the equipment side.
<h2>Shenwan Hongyuan's main viewpoints are as follows:</h2>
Marginal acceleration in railway fixed asset investment in May
In May, the total fixed asset investment in railways reached 47.4 billion yuan, a year-on-year increase of 8.72%, higher than the 5.9% growth rate from January to May. In terms of key projects, several railway construction projects made significant progress in May. The Wuhan to Yichang section of the Shanghai-Chongqing-Chengdu high-speed railway started joint debugging and testing, the Chongqing to Qianjiang section of the Chongqing-Xiamen high-speed railway began trial operation, all tunnels of the Xiong'an to Xinzhou high-speed railway's underground section were completed, all 20 tunnels of the Xi'an to Chongqing high-speed railway's Xi'an to Ankang section were completed, the ballastless track construction of the Beijing to Tangshan intercity railway's Beijing underground section was completed, and the new Suifenhe tunnel of the quality improvement project of the East Corridor of the China-Europe Railway Express was completed. The second phase of the Shenzhen Pinghu South comprehensive logistics hub project has completed the main steel structure.
Passenger and freight volumes maintain high prosperity
In May, the railway passenger volume reached 406 million, a year-on-year increase of 12.6%, while the freight volume was 440 million tons, a year-on-year increase of 0.7%. From January to May, the national railways delivered 845 million tons of coal, including 575 million tons of electricity coal, with railway direct supply to power plants maintaining a high level. The transportation of mining construction materials, smelting materials, and grain increased by 22%, 9.1%, and 5.5% year-on-year, respectively. The railway department is vigorously developing logistics general contracting services, promoting the transportation of bulk goods from &#34;road to rail.&#34; In the first five months of this year, a total of 655 logistics general contracting contracts were signed, with a contracted volume of 979 million tons.
In addition, the China State Railway Group is expanding cooperation with shipping companies to develop multimodal transport &#34;single document&#34; products, compressing transportation time and reducing overall logistics costs. From January to May, the national railways cumulatively sent 6.833 million TEUs of container cargo via rail-water intermodal transport, a year-on-year increase of 18.4%. From January to May, the China-Europe Railway Express maintained stable operations, with the Central Asia train operating a total of 6,046 trains, a year-on-year increase of 23%, and the China-Laos Railway cumulatively sending 2.502 million tons of cross-border cargo, a year-on-year increase of 8%.
The railway equipment sector in 2025 remains a highly certain investment direction
From the perspective of new demand: The &#34;14th Five-Year Plan&#34; for the development of a modern comprehensive transportation system proposes that by 2025, the national railway operating mileage will reach 165,000 kilometers, of which the operating mileage of high-speed rail will reach 50,000 kilometers; by the end of 2024, the national railway operating mileage will reach 162,000 kilometers, including 48,000 kilometers of high-speed rail. This means that at least 3,000 kilometers of new railway lines will be put into operation in 2025, including at least 2,000 kilometers of high-speed rail. From the perspective of updating and maintaining: High-speed trains, locomotives, signaling equipment, etc., have all entered the maintenance and updating cycle, further enhancing the certainty of demand on the equipment side
In terms of targets, prioritize the vehicle equipment sector and focus on core suppliers
With the peak of 25 years of operation and a major repair year, vehicle equipment is more certain. Recommended: CRRC (601766.SH) (complete vehicles and core components), HENAN THINKER AUTOMATIC EQUIPMENT (603508.SH) (train control and monitoring systems). Suggested to pay attention to TIMES ELECTRIC (688187.SH) (traction systems), China Railway Signal &amp; Communication Corp (688009.SH) (train control and communication signal systems), Times New Material (600458.SH) (vibration and noise reduction components), KN (603111.SH) (vehicle doors), Jinchuang Group (603680.SH) (interior), BOSUN (002282.SZ) (wheelsets), etc.
Risk Warning
There are uncertainties in the macro economy and policies; risks of railway investment falling short of expectations, etc

603508

601766

01766

688187

03898

002282

603111

Shenwan Hongyuan released a research report indicating that in May, railway fixed asset investment accelerated, reaching 47.4 billion yuan, a year-on-year increase of 8.72%. From January to May, national railway fixed asset investment totaled 242.1 billion yuan, a year-on-year increase of 5.9%. Railway passenger and freight volumes remained high, with passenger volume reaching 406 million trips, a year-on-year increase of 12.6%; freight volume was 440 million tons, a year-on-year increase of 0.7%. The railway sector actively promoted logistics services, signing 655 logistics general contracting contracts, with a contracted volume of 979 million tons

Zhitong

HENAN THINKER AUTOMATIC EQUIPMENT

CRRC

Times Electric

TIMES ELECTRIC

BOSUN

KTK Group

CHINA CRSC

SWHY

Shenwan Hongyuan: In May, railway fixed asset investment accelerated, and both passenger and freight volumes remained at a high level of prosperity