Cathay Pacific Haitong: Second Fuxing Motor Vehicle Tender Group 210 is optimistic about the development of high-speed rail vehicle and parts companies

The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that the number of train sets tendered for the second time by China Railway reached 210, adding 68 groups that were first tendered this year. A total of 278 groups were tendered, an increase of 13.5% compared to 245 groups in 2024. Judging from recent data, the railway industry's capital expenditure growth rate is steady, passenger and freight demand is improving, and China Railway's WeChat account revealed “increasing investment in railway construction, completing as much physical workload as possible, and ensuring the successful completion of all tasks of the “14th Five-Year Plan” of the railway. The amount of investment in the railway industry will maintain steady growth throughout the year, supporting rail transit equipment procurement expenses. I am optimistic that advanced repair tenders will remain steady, and it is recommended to focus on investment opportunities in the high-speed rail vehicle and parts industry chain.

Cathay Pacific Haitong's main views are as follows:

In 2025, 210 train groups were tendered for the second time, with a cumulative year-on-year increase of 13% for the whole year

The China Railway procurement platform issued a tender notice for the second batch of 350 km/h Fuxing smart EMUs in 2025. The scope of the tender includes the 350 km/h Fuxing smart EMU (8 cars in groups of 108 groups); the 350 km/h Fuxing smart EMU (8 cars in groups of 8 alpine models), 30 groups; and the 350 km/h Fuxing smart EMU (16 regular cars), with a total of 210 groups. Adding up the 68 groups that were first tendered this year, the total number of tenders was 278, an increase of 13.5% compared with 245 groups for the whole of 2024.

From January to July, the country's railway fixed asset investment increased 5.6% year on year, and passenger and freight volume increased steadily

Judging from recent data, the railway industry's capital expenditure growth rate is steady, passenger and freight demand is improving, and China Railway's WeChat account revealed “increasing investment in railway construction, completing as much physical workload as possible, and ensuring the successful completion of all tasks of the “14th Five-Year Plan” of the railway. The amount of investment in the railway industry will maintain steady growth throughout the year, supporting rail transit equipment procurement expenses.

In terms of railway construction, from January to July 2025, railways across the country completed fixed asset investment of 433 billion yuan, an increase of 5.6% over the previous year. In terms of railway passenger transport, from January to July 2025, the country's railways completed passenger traffic of 2,691 billion people, an increase of 6.7%; completed passenger turnover of 976.650 million people kilometers, an increase of 3.3%; in July, railways across the country completed passenger traffic of 455 million people, an increase of 6.6% year on year, and completed passenger turnover of 177.069 billion people kilometers, an increase of 5.7% year on year. In terms of railway freight, in July, railways across the country completed shipping volume of 452 million tons, an increase of 4.5% over the previous year; completed freight turnover of 34.217 billion tons and kilometers, an increase of 6.5% over the previous year.

Key company updates: CRRC signed new orders over 30 billion yuan for major contracts in May-July, and China Express recently won nearly 1.5 billion yuan in major projects

According to CRRC (601766.SH)'s “Notice of Contract Signing”, major contract orders reached 32.92 billion yuan from May to July 2025. The top value includes urban rail vehicle sales and maintenance contracts of 14.34 billion yuan, locomotive repair contracts of 6.9 billion yuan, wind power equipment sales contracts and energy storage equipment sales contracts of 4.03 billion yuan. Demand for urban rail and emerging businesses is relatively strong.

According to China Express (688009.SH)'s “Notice on Voluntary Disclosure of Winning Bids for Important Projects in the Rail Transit Market”, China Communications recently won bids for a total of 5 important railway projects and 2 important urban rail projects, with a total amount of about 1,431 billion yuan, accounting for 4.41% of the company's revenue in 2024.

Risk Alerts

Industry capital expenditure has slowed; industry tenders have fallen short of expectations.