Railway reform pushes second-step price change is expected to be strong

Price reform put on the agenda: Recently, the Development and Reform Commission warmly sponsored the reform of railway prices and rationalized the railway pricing mechanism, with a view to increasing the revenue and profits of the railway company by increasing the freight rates. We quite agree that the railway price reform will be realized with the progress of the ultra-market forecast. It is expected that the price reform plan will be announced at the end of the year and at the latest at the beginning of next year, and railway transport companies will benefit.

The reason that price improvement will exceed market expectations:

1. The debt ratio of the railway head office remains high, and huge pressures on debt and service payments lead to losses. In the first quarter of 2013, the total assets of Railway was 4555.6 billion yuan, the total liabilities were 2.8394 trillion yuan, and the debt ratio was 62.31%. The total assets were 2792.6 billion yuan and 241.27 billion yuan at the end of 2012 and the end of 2011 respectively. The total debt ratio of the railway at the end of 2012 and the end of 2011 was 62.23% and 60.63% respectively. With the rapid expansion of total assets, the debt ratio has steadily increased. It is expected that the amount of interest paid back in 2013 will exceed 140 billion yuan.

Under such high pressure, total post-tax profit for the first quarter was negatively 6.876 billion yuan, the largest loss in recent years. On the one hand, the increase in loss was due to the slowdown in the growth of the turnover caused by the macroeconomic slowdown, and it does not rule out that the general manager hopes to urge the acceleration of the price reform.

2. The work progress after the separation of government and enterprises exceeded expectations. According to our analysis, China's railway reform should be divided into four steps: separation of government and enterprises, price reform, reform of investment and financing, and diversification. At first, we thought that the entire work of the separation of government and enterprises would take approximately two years to complete, but from the actual situation, it took less than a year and the basic work has been completed.

The progress of the separation of government and enterprises was more than expected, especially the progress of Sanming's work exceeded expectations, fully demonstrating the high degree of unification of the direction of railway reform within the railway system. This is also an important basis for smooth and rapid follow-up of railway reform. As the most important step in four steps, price reform must be what Iron General hopes to achieve. Therefore, we believe that with the total advancement of iron, the progress of price reform will also exceed expectations.

At the same time, the huge assets and high debt of the railway are also a great risk. If the risk cannot be effectively controlled, slowly releasing it to a smooth landing can easily lead to a vicious outcome. Therefore, at the national level, it must also ensure that the worst results do not occur, otherwise huge debts will be paid by the state.

In the case of the same interests of all parties, the speed of change is a matter of course.

3. The objective conditions are met and the macro environment is spawned. With the gradual opening of the high-speed rail network, a large number of railway transport capacity has been released, and sufficient space for non-strategic material transportation has also been given. This part of the goods has a weak price transmission effect and provides room for price increases. At the same time, because of the macroeconomic downturn, rail freight has not benefited from the increase in transport capacity. This indicates that the railway needs to adapt to the new conditions for the opening of the high-speed railway and is a source of the pain caused by the railway reform. On the other hand, it also shows that the railway city is still facing Long distance. In order to reduce the huge depreciation effect of high-speed rails and maintain normal operation in the context of a bad economy, on the one hand, it is necessary to absorb demand with the means of more cities and the DPRK. On the other hand, it is necessary to increase prices while opening up the market to absorb some of the highway customers. To the railway.

It is recommended that transportation companies be benefited from price changes, and the Daqin Railway, which is one of the first railway asset integration platforms, be recommended.