In-depth Analysis of Investment Opportunities in Railway Sector Driven by Record Passenger Volume

According to the latest disclosed data, from January to November 2024, China’s national railways handled

, a year-on-year increase of , setting a new historical high for the same period [1]. The national railways arranged an average of per day, up 7.1% year-on-year, indicating a strong recovery in railway transportation demand.

- Leading Railway Equipment Manufacturer

• Current Share Price
  : 6.74 CNY (as of closing on December 16, 2025) [0]
• Market Capitalization
  : 190.83 billion CNY [0]
• Valuation Level
  : P/E ratio of 12.72x, P/B ratio of 1.14x, at a relatively low historical level [0]
• DCF Valuation
  : 13.37 CNY (+98.4%) in conservative scenario, 18.61 CNY (+176.1%) in neutral scenario [0]
• Technical Analysis
  : Currently in a sideways consolidation phase, with support at 6.71 CNY and resistance at 6.79 CNY [0]

• Sustained passenger volume growth hitting record highs directly drives revenue growth for transportation enterprises
• Development of cultural tourism economy boosts passenger demand
• Development of cross-border railways (Guangzhou-Shenzhen-Hong Kong High-speed Railway, China-Laos Railway) brings new growth points

• China State Railway Group dynamically adjusts train operation plans to optimize capacity allocation
• High-speed railway network continues to improve, enhancing transportation efficiency
• Increased demand for equipment renewal and replacement

1. Focus on Core Targets
   : CRRC Corporation Limited, as a leading equipment manufacturer, has relatively low valuation and room for repair
2. Seize Policy Catalysts
   : Pay attention to the implementation of policies related to the railway ‘14th Five-Year Plan’
3. Track Traffic Volume Data
   : Continuously monitor monthly passenger volume data to verify industry prosperity

1. Industrial Chain Layout
   :
   • Equipment Manufacturing
     : CRRC Corporation Limited, China Railway Signal & Communication Corporation
   • Transportation Services
     : Daqin Railway, Guangzhou-Shenzhen Railway
   • Supporting Services
     : Related infrastructure and signal system companies

2. Deepening Investment Logic
   :
   • Passenger volume growth → increased capacity demand → increased equipment procurement → benefits for equipment manufacturing enterprises
   • High-speed railway network improvement → transportation efficiency enhancement → cost reduction → profitability improvement

1. Valuation Risk
   : Valuation repair for some current targets takes time; investors need patience
2. Policy Risk
   : The railway industry is greatly affected by policies; policy changes may impact investment returns
3. Competition Risk
   : Competition from other transportation modes may affect railway passenger volume
4. Technology Risk
   : Equipment renewal cost pressure brought by technological iteration

1. Diversified Investment
   : It is recommended not to concentrate investment in a single target; moderate diversification reduces risk
2. Position Control
   : It is recommended to control within 15-20% of the total investment portfolio
3. Stop-loss Setting
   : It is recommended to set a stop-loss line of 15-20% to control downside risk

Based on current data analysis, the record-high railway passenger volume indicates that the industry has entered a boom cycle, but considering:

1. Valuation Repair Takes Time
   : Although core targets like CRRC Corporation Limited have low valuations, repair requires sustained improvement in fundamentals for support
2. Policy Catalyst Expectations
   : Relevant policies may be introduced from the end of the year to early next year, forming catalytic factors
3. Market Sentiment Impact
   : Current market sentiment is relatively cautious, which may affect short-term performance

, focusing on targets with low valuations and clear fundamental improvements, and avoiding blind chasing of highs.

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• Rating
  : Neutral to Optimistic
• Key Focus
  : CRRC Corporation Limited (601766.SS)
• Allocation Ratio
  : Recommended to account for 10-15% of the investment portfolio
• Holding Period
  : 6-12 months
• Target Return
  : 20-30%

[0] Gilin API Data
[1] Yahoo Finance - “Mainland China’s National Railways Handled 4.28 Billion Passengers in First 11 Months, Up 6.6% YoY” (https://hk.finance.yahoo.com/news/內地首11個月全國鐵路發送旅客42-8億人次-年增6-6-034831851.html)