2026-01-06 02:23Summary of National Railway (NR) Annual Working Conference Industry Overview - The conference focused on the railway equipment industry, specifically high-speed rail (HSR) and general railway operations in China. Key Highlights 1. New Rail/HSR Completion Targets - NR aims for total new rail/HSR completion of 3,000 km and 2,000 km per annum during 2026-30, which is a 20% reduction compared to the actual completion from 2021-25. This indicates a demand for approximately 140 standard trainsets of multiple units (MU) annually from new line completions [1][2][7]. 2. Passenger and Freight Volume Growth - NR projects rail passenger volumes to grow by 3.5% year-on-year and freight volumes by 1.5% year-on-year in 2026, which is a moderation from the previous year's growth rates of 4.2% and 2.1%, respectively [1][5]. 3. Demand Stability for MUs - The expected demand for new MUs is projected to remain stable at around 250 standard units annually from 2026 to 2030, considering both new line completions and replacement demand [1][6]. 4. CR450 Model Development - The new CR450 "Fuxin" MU is set to complete its model design and operational assessment in 2026, with initial orders expected in early 2027, marking a gradual replacement of the existing CRH "Harmony" MUs [1][6]. 5. Financial Performance Metrics - In 2025, total railway fixed asset investment (FAI) reached RMB 901.5 billion, a 6.0% increase from RMB 850.6 billion in 2024. New line additions were 3,109 km, slightly down by 0.1% from 2024 [4]. 6. Historical High in Revenue - Total railway transportation revenue achieved RMB 1.02 trillion, reflecting a 3.1% year-on-year increase, surpassing the target of RMB 1.01 trillion set at the beginning of the year [4]. Additional Insights - The dual-track ratio and electrified ratio are targeted to reach 64% and 78% respectively by 2030, compared to 60.8% and 75.8% in 2024 [7]. - The shift in powertrain regulations from diesel engines to power battery systems may influence the demand for new locomotives, potentially reducing tendering demand in 2026-27 [6]. Ratings and Recommendations - Neutral ratings are maintained for Times Electric A (688187.SS) and CRRC A (601766.SS), while Buy ratings are upheld for Times Electric H (3898.HK) and CRRC H (1766.HK) based on valuation and dividend yield considerations [1].