The stock contract is growing steadily, and the growth of China's high-speed rail business is strong.
On the evening of July 14, China High Speed Railway issued a semi-annual performance forecast for 2020. The company expects that during the reporting period, the newly signed contracts will reach 1.13 billion yuan, and the accumulated stock contracts will reach 2.81 billion yuan. Tianjin Metro Line 7, Sanyo Railway and other major projects are progressing smoothly, indicating that the effect of resuming production and work is obvious, and basically walked out of the negative impact brought by the epidemic.
The epidemic has repeatedly hit the main industry, but the demand in the rail transit market has increased instead of falling.
The announcement shows that because many of the company's core business subsidiaries are located in the hardest-hit areas of the epidemic, such as Beijing and Wuhan, they were seriously affected by the epidemic in the first half of the year, and project production, delivery, and acceptance were hindered, while superimposed seasonal factors led to a certain decline in revenue. However, from an objective point of view, the seasonal characteristics of the rail transit operation and maintenance industry are very obvious. With reference to the company's operating data in previous years, we can see that the income is mostly concentrated in the second half of the year, and the proportion of operating income and profits in the first half of the year is not very high.
It is also worth mentioning that in the first half of the year, the company's newly signed contracts reached 1.13 billion yuan, and the stock contracts maintained a steady growth, approaching the 3 billion yuan mark, indicating that market demand has not been significantly suppressed, and in the second half of the year, driven by the gradual recovery of the economy, industry demand is expected to be centrally released, when the company's new contracts will usher in rapid growth.
In addition, the company's major projects are progressing smoothly. Hangzhou-Shaotai high-speed railway, Taizhou region railway, Tangshan Port local railway, Tianjin Metro Line 7, and Sanyo freight railway projects have all entered the equipment supply period, and it is expected that hundreds of millions of yuan of contracts will be released in the third quarter. at the same time, with multiple measures such as increasing income, saving expenditure, and promoting money recovery, business performance is expected to pick up quickly.
Urban rail projects are gradually accelerating, and the scale of the post-market will maintain rapid growth in recent years. China's urban rail transit industry has developed rapidly in recent years. The total number of new urban rail transit operating lines in 2019 has reached 211, and the total length of new urban rail operating lines in the mainland has reached 968.77 km. The operating mileage has reached a record high, with operating mileage reaching 6427 km. According to the average investment cost of 500 million yuan per kilometer, the total investment will reach 3.2 trillion yuan. The expenditure of urban rail transit operation and maintenance accounts for about 2% of the total urban rail investment, so it is conservatively estimated that the total size of China's urban rail transit operation market will exceed 64 billion yuan in 2019.
After entering 2020, under the impact of the epidemic, the downward pressure on the domestic economy continues to increase. in order to maintain the driving force of sustained economic growth, infrastructure construction has become the main means to stimulate economic growth. as an important branch of new infrastructure, the intercity high-speed rail and urban rail transit built by cities and urban agglomerations contain huge business opportunities, and the mileage of traffic construction is expected to grow rapidly. Provide a broad growth space for the operation and maintenance service market.
Support private enterprises to participate in transport infrastructure construction and provide support for high-quality development. Recently, the "implementation opinions on supporting Private Enterprises to participate in the Construction and Development of Transport Infrastructure" was issued. It is proposed to effectively solve the pain points, blocking points, and difficulties of private enterprises in participating in the construction and development of transport infrastructure, give full play to the role of private enterprises, and improve the quality and efficiency of transportation infrastructure development. It means that the enthusiasm of private enterprises to participate in the construction and operation of transportation infrastructure will be significantly enhanced.
As a private enterprise with more than 20 years of experience in rail transit operation and maintenance industry, Shenzhou High-speed Railway has developed into the only leading platform for the operation and maintenance equipment system of the whole rail transit industry chain in China. In particular, promoted by Beijing Haidian State-owned assets Supervision and Administration Commission in 2017 and State Investment High-tech in 2018 as a controlling shareholder, social credibility, brand influence, resource integration and credit strength have been significantly improved. With the promotion of a number of policies, it is expected to give full play to its innovative advantages in China's railway market, and under the active promotion of equity incentives, it will enter a golden period of development.