Komo: Predictions for China's railway industry are conservative, but it is expected that it will continue to exceed the target

The Zhitong Finance App learned that J.P. Morgan Chase released a research report saying that China National Railway Group plans to put into operation more than 2,000 kilometers of new railway lines across the country and strive to invest 520 billion yuan in infrastructure.


Xiaoma believes that the mainland's policy direction will lay a solid foundation for the next phase of the industry and support the bank's constructive outlook on the 15th Five-Year Plan. Although the mainland's tone is cautious, actual investment delivery and additional mileage have repeatedly exceeded expectations. China Railway has exceeded its annual target for new lines by about 20% for four consecutive years. The bank expects the relevant trend to continue until 2026 and beyond.


The bank said that CRRC (01766,601766.SH) and Jidai Electric (03898,688187.SH) outperformed the market in domestic railway stocks, and believes that the industry will have better performance opportunities this year. The bank pointed out that due to increased MU density, continued expansion of high-speed railways, and clear demand for EMUs, locomotives and rail vehicles, it is expected that vehicle demand will continue to be driven. Both companies have strong order volumes and dominate the market share. For China Railway (00390), even if revenue growth tends to normalize, the transition to high-value national projects and steady growth in overseas orders will support profit margin resilience and spawn new growth engines.