Investment Highlights:

China Railway Group: From January to September, fixed asset investment increased by 10.3% year-on-year. From January to September 24, railway construction was promoted with high quality and efficiency, and the national railway completed fixed asset investment of 561.2 billion yuan, a year-on-year increase of +10.3%.

Passenger traffic: From January to September, the country's railways sent 3.33 billion passengers, a year-on-year increase of 13.5%, and a new record high for the same period in history. The national railway arranged an average of 10,792 passenger trains per day, a year-on-year increase of 9.8%.

From January to September, 1,430 tourist trains were operated to help the tourism economy and the development of the silver economy. The Guangzhou-Shenzhen-Hong Kong Express Railway sent nearly 19.9 million cross-border passengers, YOY+43.1%, and the China-Laos Railway sent 190,000 cross-border passengers.

Among them, during the National Day Golden Week, the average daily growth of passengers and freight was 9.2%, of which 21.448 million passengers were sent on October 1, a record high in single-day passenger traffic, an increase of 6.7% over the previous high. From September 29 to October 8, the national railways sent a total of 177 million passengers, of which 21.448 million passengers were sent on October 1, setting a record high in the number of passengers sent in a single day. Compared with the National Day holiday in '23, the daily average/maximum value was +9.2%/+6.7% respectively.

Freight volume: In 24Q3, the national railway sent a total of 1.004 billion tons of goods, a year-on-year increase of 3.8%, setting a record high in the volume of goods sent in a single quarter. In September 24, the national railway sent 334 million tons of goods, a year-on-year increase of 3.5%; In 24Q3, the national railway sent a total of 1.004 billion tons of goods, a year-on-year increase of 3.8%, setting a record high in the volume of goods sent in a single quarter. First, the freight capacity has been effectively expanded, with an average daily loading of 182,000 cars on the national railway, YOY+4.1%; The national railway sent 520 million tons of coal, YOY+3.5%, of which 21.59 million tons of Xinjiang coal were transported, YOY+38%, which effectively guaranteed the coal transportation needs of key enterprises. Second, the efficient operation of express trains, vigorously developing multimodal transport, closely docking with market demand, the national railway sent 9.58 million TEUs of containers, a year-on-year increase of 17.3%. During the National Day, the national railway sent a total of 115 million tons of goods, of which 11.72 million tons were sent on September 30, setting a record high for the number of goods sent in a single day.

Investment suggestion: the demand for national railway passenger traffic and freight volume continues to improve, combined with the support of equipment renewal policies, we believe that the national railway equipment, especially the rail transit vehicle (EMU, locomotive) industry chain, is expected to continue to improve. CRRC (601766. SH), Times Electric (688187. SH), Times New Materials (600458.SH), Yonggui Electric Appliances (300351.SZ); It is recommended to pay attention to the thinking train control (603508. SH）。

Risk warning: the growth of national railway passenger traffic is less than expected, the growth of freight volume is less than expected, the investment of national railways is less than expected, and the bidding of railway equipment is less than expected.