Just now, a straight-limit-up! Major positive news suddenly gaining momentum! Is this theme expected to be boosted?

High-Speed Rail Concept Stocks Surge After Noon!

According to China Central Television (CCTV) news, the “15th Five-Year Plan” major project—an iconic project of the along-the-river high-speed rail—is currently accelerating construction. It will extend from Shanghai all the way to Chengdu, linking three major urban clusters, with a total length of about 2,000 kilometers. The along-the-river high-speed rail has a total investment of more than 500 billion yuan; estimates suggest it will drive value-added growth of nearly 1.5 trillion yuan across upstream and downstream industries.

Driven by this, high-speed rail concept stocks saw a straight-line jump after the noon session opened. Shenzhou High-Speed Rail and CRRC Industrial both hit straight-line daily limit-up with boards sealed, and CRRC Heavy Industry also surged significantly for a time. So, just how big is the impact of this event? Analysts believe the key may be that expectations in the market for construction of the entire “major project” have been raised.

Straight-Line Limit-Ups Sealed

On the afternoon of March 30, Shenzhou High-Speed Rail sealed a straight-line limit-up. CRRC Industrial followed a similar pattern, but later reopened the daily limit-up board. Stocks including CRRC Heavy Industry, Jinying Heavy Industry, China Railway Group, and China Railway Construction all showed similar performance.

On the news front, according to a message released by CCTV noon news on March 29, the world’s largest-diameter high-speed rail tunnel boring machine “Linghang” independently developed by China successfully completed the 11.18-kilometer underwater section construction task under the Yangtze River, moving one step closer to accurately reaching the “Inspection Rest Station” at vertical shaft No. 2. Since it began operation from Chongming Island in Shanghai on April 29, 2024, “Linghang” has carried out 23 months of safe excavation, crossing the southern riverbank embankment of the Yangtze River, and has successfully “come ashore,” arriving in Taicang, Jiangsu.

A China Business Network report notes that China will build high-speed rail under the Yangtze River. The total investment in the along-the-river high-speed rail exceeds 500 billion yuan and will drive value-added growth of nearly 1.5 trillion yuan across upstream and downstream industries.

Major Project Expectations May Be Boosted

In addition to high-speed rail under the Yangtze River, other major projects are also set to start soon.

According to CCTV News, the Xi-Yu high-speed rail, about 739 kilometers long, is an important component of the Jing-Kun Xin channel and the Bao (Yin)-Hai Xin channel within China’s “Eight Vertical and Eight Horizontal” high-speed rail network. It is expected to be completed and open to traffic during the “15th Five-Year Plan” period. At present, this north-south artery is being accelerated in construction. Xi-Yu high-speed rail runs from Xi’an in the north to Chongqing in the south. It is the first railway in China to cross the hinterland of the Dabashan Mountains, and its construction is divided into two sections: Xi’an to Ankang, and Ankang to Chongqing.

According to First Finance, after approvals were issued in January for the feasibility study report on the newly built Jinggang high-speed rail Fuyang–Huanggang section, on March 24, the National Development and Reform Commission website released approvals for—recently—the project proposal documents for the newly built Qianjiang–Jishou railway and the newly built Nanyang–Xinyang–Hefei railway. The mainline’s total length is 318.1 kilometers, with a designed speed of 350 kilometers per hour, and a total investment of about 52.1 billion yuan. The Fuyang–Huanggang high-speed rail is an important component of the “Eight Vertical and Eight Horizontal” Jinggang (Tai) corridor. In addition, the newly built Wuhan hub direct line project and the Sichuan Nanchong to Guang’an high-speed rail have also been confirmed for near-term starts.

A report from China Fortune Securities shows that in 2021, the State Council issued the “National Integrated Three-Dimensional Transportation Network Plan Outline.” Both documents put forward consistent requirements for the scale of China’s railway network in 2035: by 2035, the national railway network should reach around 200,000 kilometers, of which high-speed rail should be around 70,000 kilometers. Based on the scale of the “14th Five-Year Plan” railway network, to meet the 2035 target, from 2026 to 2035 about 35,000 kilometers of railway must be built, including about 20,000 kilometers of high-speed rail. That implies about 3,500 kilometers of new railway lines will be put into service each year, of which about 2,000 kilometers will be high-speed rail. The long-term target of 200,000 kilometers is expected to create a broad market space for the rail transit equipment industry.

Analysts believe expectations for major project construction may be raised. According to data from Haitong Securities, on March 13, the “15th Five-Year Plan” outline was formally released, comprising 70,000 Chinese characters, 16 major strategic tasks, and 109 major projects across six major areas. For infrastructure, the focus is on “connecting networks, filling gaps, and strengthening supply chains,” arranging coastal, border, and along-river corridors; “arteries” for entering Xinjiang and Tibet; and the new western land-sea corridor. It also aims to address shortfalls in facilities in western and border regions and strengthen international transport corridors such as the China-Europe freight trains and nodes for the Silk Road maritime shipping network. It also focuses on trillions-of-yuan energy major projects such as new energy bases and offshore wind power bases.

In addition, in the “15th Five-Year Plan” outline, a category of “new-type infrastructure construction” is specifically listed alongside transportation infrastructure construction, energy system construction, and water network construction. The focus of new-type infrastructure is on future industrial projects, such as artificial intelligence ultra-large-scale computing clusters, satellite internet, and controllable nuclear fusion, among others. This indicates that the strategic positioning of new-type infrastructure has already reached parity with legacy infrastructure, and it will be a key direction for construction aimed at the new stage of development.

Layout: Liu Junyu

Proofreading: Li Lingfeng