Industry Overview:
From the performance of each sub sector of transportation relative to CSI 300, the overall transportation sector fell this week (March 7-march 11), and the railway transportation sector fell 3.23%.
Railway: several high-speed railway projects are proposed during the two sessions
The epidemic situation in China has been repeated, or the recovery process of railway passenger flow may be delayed. As of 24:00 on March 13, 2022, 1437 newly confirmed cases have been added in China, including 100 imported cases and 1337 local cases, involving Hebei, Guangdong, Jilin, Shanghai, Shandong, Yunnan, Jiangxi and other provinces and cities. The railway department will quickly and significantly adjust the operation of passenger trains, and introduce measures for free refund of passenger train tickets. When handling the refund of valid tickets of all trains purchased before 0:00 on March 15, 2022, no refund fee will be charged. It is expected that Beijing-Shanghai High Speed Railway Co.Ltd(601816) performance will be repaired or damaged in the first quarter of 2022.
During the “two sessions”, representatives from Fujian, Shanxi, Hunan and Ningxia put forward suggestions on accelerating the construction of high-speed railway projects in the province, and the networking process of high-speed railway may be further accelerated. During the “two sessions”, the Fujian delegation submitted suggestions on accelerating the preliminary work of Wenzhou Fuzhou high speed railway project; The Shanxi delegation submitted a proposal to start the capacity improvement project of passenger transport channel of Taiyuan railway hub as soon as possible; The deputies of Hunan Provincial People’s Congress submitted suggestions on accelerating the preliminary work of Xiangfan Changzhou high-speed railway (Yichang Changde section) and Shizhang high-speed railway; Qi Tongsheng, member of the National Committee of the Chinese people’s Political Consultative Conference in Zhuning, submitted the proposal on including Yinchuan Taiyuan high-speed railway in the national medium and long-term railway network planning in the new era and the railway development planning in the 14th five year plan, which will consolidate and improve the capacity of passenger transport channels connecting north and East China in the east of Ningxia.
It is suggested to focus on Beijing-Shanghai High Speed Railway Co.Ltd(601816) . 1) The epidemic has repeatedly affected the recovery of passenger flow, and the subsequent repair of high-speed railway will be significantly faster than that of ordinary railway. 2) Capacity and ticket price space have been opened. The train diagram in the third quarter of 2021 has greatly improved the capacity space of high-speed railway. The ticket price of second-class seat of benchmark train is implemented according to the “published ticket price” of 662 yuan. A more flexible pricing method may be implemented in the future. 3) In the follow-up, more high-speed rail networks will be connected, and the intersection area where Beijing Fuzhou Anhui is located will play an advantageous role, undertaking more passenger flows to the north or south, and the speed of turning losses into profits in Beijing Fuzhou Anhui may exceed expectations. 4) The operation of Jingfu Anhui is gradually mature, and there is room for improvement in the proportion of subsequent dividends.
Risk tips
(1) the global economic recovery is not up to expectations (2) the risk of epidemic deterioration (3) the construction speed of high-speed railway is lower than expected (4) the oil price rebounds sharply
