Beijing-Shanghai, rail line profit star

Route sees 130m trips annually, was first to go into the black in three years

The Beijing-Shanghai high-speed railway has become the nation’s most profitable and convenient rail project, boasting an annual profit of 6.58 billion yuan ($983.6 million), according to data released by one of its shareholders.

Beijing-Shanghai Highspeed Railway Co Ltd, a subsidiary of the national railway operator China Railway Corporation, reached record revenue of 23.42 billion yuan, and net income of 6.58 billion yuan in 2015, its shareholder Tianjin Railway Construction Investment Holdings (Group) disclosed in the bond prospectus earlier this month.

The Beijing-Shanghai bullet train line has become a role model that offers bright prospects for the rail sector, especially for the strategic investors, said Feng Hao, a rail transportation researcher at the National Development and Reform Commission.

“It provides a quality management solution for highspeed rail routes both in operation and under construction,” he said. “Also, it proves that high-speed rail lines can generate a profit, even in the short term.”

Last year, passengers made nearly 130 million trips by the Beijing-Shanghai high-speed railway, according to the data released by China Railway Corporation. Thus it is estimated that each trip per passenger contributed an average of 50 yuan to the line.

In addition, the company devotes attention to passenger services. Some stations take advantage of social media such as WeChat, Weibo and other mobile apps to offer passengers real-time information including schedules, trips and tickets.

“The city-to-city line is very convenient. When there’s something urgent to deal with, I prefer to take the train rather than the airplane. Though sometimes the train costs more, it is seldom delayed. And I’m satisfied with the train’s environment,” said Wen Yingya, who works at a Shanghai-based construction company as technician, and goes back home by train every three months.

“Annual trips have amountedto 130 million, equaling the number of people going abroad, and the firm manages its current business very well,” said an expert who refused to be named and is familiar with the firm’s business. “It’s time for the shareholders to enjoy the investment income. Such a project typically invests with a time horizon of three to five years.”

The Beijing-Shanghai line was the first in China to start turning a profit within three years. It was initially proposed in 1990, but construction only began in 2008. The work was finished in 2011, and it opened to the public in June that year. The cost was about 208.8 billion yuan.

Jing Shuiyu contributed to this story.