Analysis of Cash Management and Bond Financing Strategy of Beijing-Shanghai High-Speed Railway

According to the financial data disclosed by Beijing-Shanghai High-Speed Railway, the company’s cash has shown significant fluctuations [0]:

• The significant decline in cash in H1 2024 was mainly due to the company repaying existing loans and paying dividends [0]
• The cash rebounded to 17.523 billion yuan at the end of June 2025, mainly because “the number of maturing loans decreased this period, and the net cash outflow from financing activities decreased due to the temporary non-payment of 2024 accrued dividends” [0]

Beijing-Shanghai High-Speed Railway has undertaken large-scale infrastructure construction tasks in history. When the company initially built the Beijing-Shanghai Passenger Dedicated Line, it introduced social capital such as Ping An Asset Management and Social Insurance, significantly reducing its debt pressure [1]. After the company acquired Jingfu Company in 2020, Jingfu Company had high debt pressure due to the completion of two new lines in recent years, with about 60 billion yuan of long-term debt [1].

From the industry perspective, the registered quota of China Railway Construction Bonds in 2025 reached 300 billion yuan, of which 195 billion yuan was for debt structure adjustment [2]. As a core asset of China State Railway Group Co., Ltd., the debt financing activities of Beijing-Shanghai High-Speed Railway need to be understood within the debt management framework of the entire railway system.

The interest rate range of the company’s long-term loans is 3.8%-5.2%, and the large debt scale has led to high historical interest expenses [1]. Maintaining a high level of cash is conducive to:

• Coping with liquidity pressure from debt maturity and redemption
• Avoiding significant fluctuations in financial expenses caused by concentrated debt repayment
• Maintaining the company’s credit rating and market financing capacity

Railway transport business has typical heavy asset and high fixed cost characteristics:

• Fixed assets account for up to 73.15% (data as of the end of June 2025) [0]
• Continuous capital expenditure is required for equipment renewal and line maintenance
• Passenger transport revenue has seasonal fluctuations

From the background of industry debt structure adjustment, the bond financing of Beijing-Shanghai High-Speed Railway may be more about:

• Borrow New to Repay Old
  : Replace high-interest loans with low-interest bonds
• Term Optimization
  : Extend debt terms to reduce concentrated redemption risks
• Financing Cost Control
  : Seize the window of declining market interest rates to reduce comprehensive financing costs

1. Capital Utilization Efficiency
   : The yield management of 17.5 billion yuan of cash deserves attention
2. Debt Scale
   : The balance of long-term loans still reached 49.342 billion yuan (as of the end of June 2025) [0]
3. Dividend Policy
   : The temporary non-payment of accrued dividends may affect shareholders’ return expectations

According to the latest data, the current ratio of Beijing-Shanghai High-Speed Railway is 1.43, and the quick ratio is 1.43 [0], indicating good short-term debt repayment capacity; the net profit margin is 30.64% and ROE is 6.42% [0], showing stable profitability.

The debt financing of Beijing-Shanghai High-Speed Railway despite having more than 17 billion yuan of cash is reasonable from the perspective of financial strategy:

1. Liquidity Management Perspective
   : Heavy asset industries need to maintain sufficient liquidity buffers
2. Financing Cost Perspective
   : Debt replacement can optimize the financing structure and reduce financial expenses
3. Strategic Development Perspective
   : Reserve capital space for future capital expenditure and potential mergers and acquisitions

However, investors should pay attention to the yield of the company’s cash and the potential impact of the overall debt pressure of the major shareholder China Railway System on the company.

[0] Jinling AI Financial Database - Financial Data of Beijing-Shanghai High-Speed Railway
[1] Guosen Securities Research Report - In-depth Analysis of Beijing-Shanghai High-Speed Railway
[2] Shanghai Stock Exchange - 2025 China Railway Construction Bonds Prospectus (http://static.sse.com.cn/disclosure/bond/announcement/corporate/c/new/2025-04-15/184809_20250415_5C1M.pdf)
[3] 2024 Annual Report of Beijing-Shanghai High-Speed Railway Co., Ltd. (http://static.cninfo.com.cn/finalpage/2025-04-30/1223415927.PDF)
[4] 2025 Semi-Annual Report of Beijing-Shanghai High-Speed Railway Co., Ltd. (https://stockmc.xueqiu.com/202508/601816_20250830_OW6F.pdf)