Galaxy Securities in China: The railway industry remains highly prosperous, and railway investment is expected to remain at a high level.

China Galaxy Securities stated that China Railway Group has issued the tender notice for the procurement of the second batch of 350 km/h high-speed Fuxing intelligent EMU trains in 2025, with a total of 210 standardized sets. The tender for the second batch of EMU trains in 2025 exceeded expectations. According to our analysis of the routes, it is expected that the annual average of new mileage put into operation from 2025 to 2027 will exceed 3,000 kilometers, with peak traffic in 2025 and 2027, requiring an additional 300 sets of EMU trains per year on average. At the same time, there is a large stock of railway vehicles that require upgrading and maintenance, with the high-level maintenance of EMU trains entering a period of high volume. The railway industry remains highly prosperous, with railway investment expected to remain at a high level. We continue to have a positive outlook on the procurement of new EMU trains and high-level maintenance, as well as locomotive tenders, which are expected to support the steady growth of railway equipment companies' performance.