Beijing-Shanghai High Speed Railway Co has applied to list on the Shanghai stock market. According to the filing, Beijing-Shanghai High Speed Railway Co, which operates the 1,300km line from Beijing to Shanghai, recorded a net profit of 9.5 billion yuan in the first nine months of the year. It has an impressive net profit margin of about 38%.
The rail company saw a net profit of 10.2 billion yuan in 2018, up more than 13% from 2017. The company intends to raise funds to buy other railway projects in southeast China’s Anhui province.
Analysts said that this planned initial public offering was likely to be popular because of its healthy financial position and bright prospects.
“There hasn’t been a listing of a company from China’s railway sector in a very long time…This is certainly a good development for China’s capital markets and for the industry.”– Wu Kan, investment manager at Soochow Securities in Shanghai
Trains on the Beijing-Shanghai line run at speeds of up to 350km/h, bringing the journey time between the two cities to 4.5 hours. The service has been operating at an average occupancy rate of 80% this year. The success of this route highlights the strong demand for high-speed rail services in major cities in China. In 2018, the line carried 192 million passengers.
“The route is China’s most active, with high growth prospects, and is a corridor for rapidly growing traffic volumes… But if there is volatility in the macroeconomy, it could have an adverse effect on the company’s performance.”– Company filing
As of the end of September, the company had assets of 187 billion yuan and liabilities of 27 billion yuan.