China Railroad Industry Future

The global railway market, especially the equipment and maintenance service market, will continue to grow steadily. According to UNIFE’s calculations, the average annual fixed investment in 2015-2017 will reach approximately 1.19 billion euros, an increase of 9% compared to the average annual investment in 2012-2014. Unlike China’s high infrastructure situation, globally, there is more room for market development for global rail vehicles and related services. This is very conducive to the overseas market development of Chinese railway parts manufacturers.

It is estimated that emerging markets are still a breakthrough for Chinese railway equipment manufacturers. Judging from the current market share of South and North vehicle export orders, emerging markets account for 80%, and developed markets account for 20%.
We believe that production localization and the “product + service” model are the future development direction of exports. Although China’s rail transit products have advantages over other international competitors in terms of price, they have more room for development in terms of customized production, high environmental protection index, and multiple applicability. Chinese equipment manufacturers are working hard to open up overseas markets for high-value-added products. We believe that production localization and the “product + service” model are the future development direction of experts.

Although railway parts manufacturers face more complex and changeable risk factors, such as technology patents, turbulent political situations, etc., we believe that South and North Motors will benefit from the international transformation of overseas expansion. The price is adjusted by about 20%. But we think the industry and the company are basically good.