The National Railway opened the bidding for the Fuxing, with an amount of more than 28 billion yuan, and the equipment investment continued to heat up

Reporter Lu Bingyang reports from Beijing

China's high-speed EMU industry has ushered in the largest single-round bidding in the past seven years. China State Railway Group Co., Ltd. (hereinafter referred to as "China Railway Group") issued an announcement on May 11, opening the first tender for rolling stock in 2024.

The largest EMU tender in 7 years

According to the above announcement, the Fuxing intelligent configuration EMU with a speed of 350 kilometers per hour (8 marshalls) was tendered respectively; There are 132 groups, 13 groups and 20 groups (10 trains) of the 350 km/h Fuxing intelligent configuration EMU (8 cars) and 350 km/h Fuxing intelligent configuration EMU (17 cars), a total of 165 standard groups.

China Railway EMU is divided into 4 types: 4 cars, 8 cars, 16 cars and 17 cars. A 4-car formation is very rare, an 8-car formation is called a standard column, a 16-car formation is called a long column, and a 1-column long column is converted into 2 standard columns.

In addition to the bidding EMUs, there are also 310 sets of supporting electrical on-board equipment. According to the estimation of the reporter of "China Business Daily", the total amount of this bidding is about 28 billion yuan, calculated at the price of about 170 million yuan for a single Fuxing high-speed EMU.

According to the above announcement, the owners of the bidding project are China Railway Group and Daqin Railway Co., Ltd., and the construction funds come from the purchase of mobile equipment, and the project contribution ratio is 100%.

The most recent tender that exceeded the number of tenders was seven years ago. On October 17 of that year, China Railway Corporation, the predecessor of China Railway Group, launched the second bidding for high-speed EMUs that year, bidding for a total of 182 trains with a total price of about 32 billion yuan (see China Railway Business Network on October 18, 2018 reported that "China Railway Bidding Fuxing No. 2 in the Year Totals 32 Billion Yuan Annual Locomotive and Rolling Stock Investment Broke Record").

The number of tenders for high-speed EMUs is closely and positively correlated with railway passenger flow. During the new crown epidemic from 2020 to 2022, the railway passenger flow fell off a cliff, with the three-year railway passenger flow of 2.203 billion, 2.612 billion and 1.673 billion respectively, with a year-on-year increase or decrease of -39.8%, 18.5% and -35.9% respectively. Among them, the national railway passenger volume in 2022 will only be 45.71% of that in 2019, the lowest value since 2010 (for details, see "Railway freight volume of 3.9 billion tons in 2022 breaks the historical record, passenger volume of 1.6 billion passengers is the lowest in 13 years" reported by China Business Network on January 4, 2023).

At the same time, the China Railway Group's procurement of 350 km EMUs has entered a trough, according to the reporter's statistics, from 2020 to 2022, China Railway Group will only purchase 83 groups, 29.5 groups and 92 groups of 350 km EMUs in each year.

After entering 2023, the national railway passenger flow will recover rapidly, and the China Railway Group will complete the dispatch of 3.68 billion passengers, a year-on-year increase of 128.57%, and the number of passengers sent on peak days will exceed 20 million, and the annual and peak day passenger volume will reach a record high.

The rapid growth of railway passenger flow has stimulated the demand for high-speed EMUs by China Railway Group. In the whole year of 2023, the number of high-speed EMUs tendered by China Railway Group soared directly to 158 groups, a year-on-year increase of 71.74%, and the total amount reached about 27.3 billion yuan (for details, see "The Second Bidding for 55 High-speed EMUs in the Year, About 9.5 Billion Yuan" reported by China Business Network on November 28, 2023).

In the first quarter, the number of passengers sent by railways across the country exceeded 1 billion for the first time, reaching 1.014 billion, a year-on-year increase of 28.35%; The average number of passengers sent daily was 11.147 million, a year-on-year increase of 28.5%, breaking the record for the same period in history.

The picture shows the Fuxing intelligent EMU being manufactured on the CRRC long-distance passenger production line. Lu Bingyang/photo

Investment in equipment continues to heat up

China Railway Group told reporters that the current passenger flow of high-speed rail EMUs has accounted for about 77% of the total passenger volume, and this proportion is still increasing, "the rapid growth of passenger flow, especially the passenger flow of high-speed rail lines, continues to stimulate the demand for vehicles of the National Railway Group."

The above-mentioned person also told reporters that this bidding is the first high-speed EMU bidding of China Railway Group in the year, and it is not ruled out that there will be a second bidding within the year, but it is not yet possible to confirm whether the number and amount of the second bidding and the number of EMUs tendered throughout the year can exceed 2018.

According to the reporter's statistics, China Railway Corporation, the predecessor of the National Railway Group, bid for the Fuxing twice in 2018 with a speed of 350 kilometers per hour, a total of 327 trains, with a total price of nearly 57 billion yuan.

Regarding the use of EMUs, Shan Wei, Director of the EMU and Passenger Car Division of the Locomotive Department of China Railway Group, revealed at the mobile equipment safety and green development sub-forum of the 4th World Railway Cooperation and Development Forum held on November 16, 2023 that the total number of high-speed EMUs in China currently accounts for more than two-thirds of the total use in the world, and the cumulative safe operation mileage of China's high-speed EMUs is currently 16.8 billion kilometers (see China Railway Group: EMU repair process continues to be significantly extended for details, as reported by China Business Network on November 17, 2023 Evaluating the increase in train life to more than 30 years).

Shan Wei said that from 2012 to 2020, the number of high-speed EMUs in China has gone through a period of rapid growth and has entered a period of steady growth in recent years. In terms of the proportion of EMUs of different speed grades, EMUs with a speed of 350 km/h account for 62.64% of the total; 250 km/h EMUs accounted for 36.25%; The power centralized EMU with a speed of 160 kilometers per hour accounted for 1.11%. At present, there are 8 high-speed railways operating at a speed of 350 kilometers per hour.

According to the 2023 statistical bulletin of China Railway Group, by the end of 2023, the number of EMUs in China was 4,219 standard groups and 33,800 units.

The huge number of high-speed EMU tenders is directly beneficial to CRRC Corporation (601766. SH, hereinafter referred to as "CRRC") operating results. According to CRRC's annual report, in 2023, CRRC will achieve operating income of 234.262 billion yuan, a year-on-year increase of 5.08%; The net profit was 11.712 billion yuan, a year-on-year increase of 0.50%, and the net profit increased for two consecutive years.

From the perspective of revenue by product, the revenue of CRRC's railway equipment segment increased the most. CRRC said this was mainly due to the sharp increase in revenue from the EMU and bus business.

The railway equipment business is currently the largest business in CRRC's operating revenue, accounting for 41.92%, an increase of 4 percentage points over 2022. Among them, 1,324 EMUs were sold, and the revenue reached 41.829 billion yuan. At present, CRRC Group is still CRRC's largest customer, and CRRC's sales to CRRC Group in 2023 will account for 38.40% of its total sales, an increase of 6 percentage points over 2022.

(Editor: Hao Cheng Review: Meng Qingwei Proofreader: Yan Yuxia)