Railway investment accelerates or favors construction machinery

With the acceleration of railway investment in the fourth quarter, the Ministry of Railways has invited tenders for vehicles such as EMUs, locomotives, and trucks soon. Railway equipment manufacturing companies have received significant market attention as direct beneficiaries.

Many industry analysts believe that the speed of railway investment will increase, and the orders of relevant companies in the industry chain will increase. Railway equipment will have more definite investment opportunities.

Railway Investment Warming According to the data recently released by the Ministry of Railways, the national railway fixed asset investment completed 81.013 billion yuan in October, an increase of 141.2% year-on-year, the highest growth rate since March 2009. Among them, the railway infrastructure investment for the month was 69.776 billion yuan, an increase of 240.8% from the 20.476 billion yuan in the same period of last year, and an increase of 8.5% from the previous period, which was the highest in recent years.

In the first 10 months of this year, China's railway investment in fixed assets completed 425.17 billion yuan, a year-on-year decrease of 0.9%; infrastructure investment was 361.83 billion yuan, a year-on-year decrease of 1.5%.

If calculated according to the latest scale of the national railway fixed asset investment plan of 2012 announced by the Ministry of Railways, the total capital investment for this year will be 516 billion yuan. To complete the annual investment plan, railway investment must complete nearly 200 billion yuan in the last two months of this year. In other words, railway investment in the next two months will increase by 30% year-on-year, and it will increase by 33% month-on-month.

As an important “stabilizing growth” infrastructure project of the country, the recovery of the railway industry and the resumption of railway equipment orders are the logical progression. Everbright Securities said in its latest report.

In addition, from the perspective of urban rail transit, the September Development and Reform Commission concentratedly approved a large number of urban rail transit construction projects. The total construction in progress amounted to approximately 1,840 kilometers, and the number of long-term construction miles reached 3,600 kilometers, which will bring approximately 1.6 trillion yuan in investment. .

According to the calculation of 6 vehicles per kilometer in large high-density cities and 3 vehicles per kilometer in cities with medium-sized and lower population density, the demand for vehicles may exceed 3,000 vehicles in the next few years. The rapid growth of upstream investment has brought about a rapid increase in demand for rail transit equipment, and related manufacturers will benefit.

The acceleration of bidding for vehicles to restart investment in railway infrastructure will also provide opportunities for railway equipment manufacturing. According to a reporter from the China Securities Journal, the Ministry of Railways has recently initiated tenders for a number of vehicles such as motor vehicles, trucks, and locomotives.

According to brokerage analysis, CSR’s current and non-delivery orders are approximately 730 EMUs, which basically meet the demand for existing high-speed railway lines for EMU at the end of 2012. In 2013, the completion of high-speed rail will face the embarrassing situation of no-car available, and the response of the grass-roots road bureau is still very lacking, whether it is an EMU or a locomotive.

According to historical experience, the procurement of vehicles began 1-2 years before the high-speed rail project was completed. The Ministry of Railways requires a delivery period of 8-10 months. In order to alleviate the shortage of vehicles in 2013, the Ministry of Railways is about to start an EMU tender with a scale of 300-400 columns.

In addition, as the passenger dedicated lines and high-speed rails are opened one after another, the limited cargo capacity will also be fully released and the demand for trucks will also be stimulated.

"At the end of last year, the number of trucks in our country was 643,000, and there were 140,000 self-owned vehicles. The satisfaction rate of China National Railways' freight cars was only less than 40%. The demand for self-owned vehicles was also continuing to be released, together with the old With the replacement of trucks, it is expected that the total demand growth rate of domestic trucks can be maintained at around 10%.” CSC Securities forecast in its latest report.

This year, raw material prices continue to decline, which also makes the company's costs relatively lower, which is conducive to the improvement of gross profit margin. "This year's raw materials fell by about 200 yuan per ton, while the average axle price rose to 4,500 yuan. It is expected that the gross margin of the axle will increase to more than 9%," analysts said.