Shenwan Hongyuan Group: July passenger volume reaches a new high, bid for the second batch of high-level maintenance of EMUs starts.

Shenwan Hongyuan Group released a research report stating that railway passenger traffic and railway fixed asset investment have reached new highs, and the bidding for the second batch of advanced repairs for EMUs (Electric Multiple Units) will commence in 2026. The substantial fleet of vehicles ensures growth in the aftermarket; for example, in terms of EMUs, the design life estimates indicate that starting from 2027, the Harmony trains will enter a replacement cycle, necessitating extensive repairs or replacements for many trains. The firm is optimistic about the main manufacturers of railway vehicles and their core suppliers. The main points from Shenwan Hongyuan Group are as follows: Event According to information disclosed by the National Railway Group, from January to July, the national railway fixed asset investment reached 440.6 billion yuan, a year-on-year increase of 1.8%; the number of passengers sent by the national railway totaled 2.8 billion, up 4.1% year-on-year. Information from the national railway procurement platform shows that the bidding for the second batch of advanced repairs for EMUs will start in 2026, with 138 units (161.125 sets) for Level 3 repairs, 89 units (105 sets) for Level 4 repairs, and 143 units (155 sets) for Level 5 repairs. Railway passenger volume and fixed asset investment have both reached new highs In terms of passenger transport: from January to July, the national railway sent a total of 2.8 billion passengers, representing a year-on-year increase of 4.1%; the national railway arranged an average daily operation of 11,462 passenger trains, an increase of 571 trains or 5.2% year-on-year. In terms of fixed asset investment: from January to July, the national railway fixed asset investment completed was 440.6 billion yuan, a year-on-year increase of 1.8%. The bidding for the second batch of advanced repairs for EMUs in 2026 has begun This round of bidding will procure 138 units (161.125 sets) for Level 3 repairs, 89 units (105 sets) for Level 4 repairs, and 143 units (155 sets) for Level 5 repairs. Considering the first half of the years bidding, the total procurement for the entire year of 2026 will be 297 units (346.5 sets) for Level 3 repairs, 168 units (208 sets) for Level 4 repairs, and 216 units (233 sets) for Level 5 repairs, bringing the total to 681 units (787.5 sets). The scale of railway vehicle ownership is expanding, leading to increased demand for maintenance and replacements in the aftermarket According to data from the 2025 Railway Statistics Bulletin, the national railway owns 22,700 locomotives, of which 7,900 are diesel locomotives and 14,700 are electric locomotives. The total number of railway passenger cars owned by the national railway is 83,000, including 5,230 sets of EMUs and 41,836 cars. The total number of railway freight cars is 1,024,000. The substantial fleet of vehicles ensures growth in the aftermarket; for instance, estimating based on the design life of EMUs, starting from 2027, the Harmony trains will soon enter a replacement cycle, prompting a significant number of trains to require major overhauls or replacements. Optimism towards main manufacturers of railway vehicles and their core suppliers Key attention: CRRC Corporation (whole vehicles and core components), Zhuzhou CRRC Times Electric (traction systems), Henan Thinker Automatic Equipment (train control and monitoring systems), China Railway Signal & Communication Corporation (train control and communication signal systems), Zhuzhou Times New Material Technology (vibration and noise reduction components), Nanjing Kangni Mechanical & Electrical (train doors), KTK Group Co., Ltd. (interior fittings), Bosun Co., Ltd. (wheel pairs), Jinxi Axle (axles and carriages), China Railway Construction Heavy Industry Corporation Limited (shield tunneling machines), China Railway Hi-tech Industry Corporation (shield tunneling machines), etc. Risk warning: There are uncertainties in the macroeconomic environment and policies; risks related to railway investment falling short of expectations, etc.