The railway logistics transformation opportunity is outstanding

In the fourth quarter, the reform of railways will enter the stage of reform of the plasticity reform. Reforms in investment and financing systems, price reforms, and corporatization reforms will gradually introduce implementation rules, which will have a far-reaching impact on railway transport enterprises. The economy has rebounded since mid-July and is progressing step by step. Looking into the fourth quarter, the probability of the economy entering the boom interval has increased. In terms of overall strategy, the forces of change will continue to “fill valuations with low prices”, mainly including railways and logistics. The investment portfolios are: Daqin Railway (Buy), Guangzhou-Shenzhen Railway (Buy), Shanghai Airport (Buy), Zhong Chu Shares (buy), C&D shares (buy, new transfers), Yiyatong (overweight), and bonded technology (overweight).

Summary of the report: According to the economy, the economic prosperity of the Q4 economy is expected to continue to pick up: the related indicators in the Logistics Prosperity Index (LPI) have been fully improved, and the average daily freight volume of rail freight fell below 10 million tons, and the rebound stabilized at 10.90 million tons. In the boom zone, it will continue to rebound in October; the year-on-year ratio of imported and exported container traffic is basically better than that of the same period of last year; the leading indicators of the Li Keqiang index have reached a new high during the year, and the outlook for Q4 is that the probability of continued economic boom has increased.

Railway reform is still the main melody, and the release of reform dividends is accelerating: the railway reform has entered the second wave of tough battles, the State Council has begun to deploy investment and financing system reforms, and corporateization reforms and price reforms will gradually start as the twins, and the “Opinions” on August 19th. The contents of railway investment and financing, price reforms, tariff subsidies, and land development are clearly defined. The release of railway reform dividends has been accelerated. We believe that the railway reform is still the main theme of the industry this year and next, and the reform dividend will enter the stage of substantial release and will gradually accelerate. We are firmly optimistic about the "railway marketization reform" dividend, and railway transport companies in the reform have major opportunities for reform and benefit.

The transformation of logistics has increased and the free trade area has been brilliant: The current e-commerce logistics has begun to flourish, and the emergence of the “rookie network” will strengthen this trend. We believe that Cainiao Logistics will lead the trend of reform and development of modern e-commerce logistics. Logistics center (node ​​logistics), distribution network and logistics information and intelligence (visual logistics, automated logistics) and other aspects have a transformative impact. The theme of the free trade zone is expected to be interpreted as the main driver of future operational conditions. We are optimistic about the investment opportunities of the relevant sectors that have not been transferred under the continuous fermentation of the trading zone.