High-Speed Rail Stocks Surge in Morning Trading Following Beijing-Shanghai Line Fare Hike of 20%

Stock News05-12

High-speed rail concept stocks rose broadly in morning trading. At the time of writing, CRRC (01766) was up 4.61% at HK$5.45; GUANGSHEN RAIL (00525) gained 4.88% to HK$2.58; TIMES ELECTRIC (03898) edged up 0.64% to HK$37.56.

The move follows an announcement from Beijing-Shanghai High Speed Railway Co.,Ltd. regarding an optimized adjustment to the published fares for its bullet train services on the Beijing-Shanghai High-Speed Line and the Hefei-Bengbu High-Speed Line. Fares for trains with speeds of 300-350 km/h and 200-250 km/h will increase by approximately 20%. The actual ticket price for each station pair will be subject to various discounts, with the published fare serving as the upper limit.

The company stated the adjustment aims to improve the market-based pricing mechanism and enhance passenger service quality, but the impact on its financial performance remains uncertain.

Analysts note that against a backdrop of high oil prices, rising airfares and reduced flight schedules are prompting a shift of long-distance travelers towards high-speed rail. Furthermore, with the continued expansion of the national "Eight Vertical and Eight Horizontal" high-speed rail network and the wider adoption of flexible pricing mechanisms, the trend of rising average high-speed rail fares is becoming established. Core companies in the sector are positioned to potentially benefit from both earnings growth and valuation expansion.

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