2025-06-10-花旗集团-全球金属与采矿业_中国铁路支出具有韧性_2025年第一季度同比增长5.1_（2024财年增长11_之后）_有望迎来铁路支出最高的一年_9页_244kb

Summary of Document: Global Metals & Mining

Core Content

This document provides an analysis of railway spending trends in China, highlighting its significance as a bellwether for fiscal spending and its implications for the metals and mining sector, particularly steel demand. It also includes important disclosures and legal information regarding Citi Research's investment ratings and potential conflicts of interest.

Main Points

Railway Spending Trends in China

• Railway capital expenditure (capex) has shown a recovery trend following years of decline.
• 1Q'25 railway spending increased by +5.1% y/y, continuing the upward trajectory after a +11% y/y increase in FY'24.
• The growth in railway spending is expected to lead to the highest rail spend year in China if the trend continues.
• Historical context:
  • FY'21: -4% y/y
  • FY'22: -5% y/y (lowest since 2013 at 711bn RMB)
  • FY'23: +8% y/y (strongest growth in a decade), reaching 765bn RMB
  • FY'24: +11% y/y, reaching 851bn RMB, higher than 2015 levels
• Railway spend in FY'24 was 851bn RMB, which is higher than 2015 and on track to reach ~900bn RMB for the year if the current growth rate is sustained.
• Railway spending is more volatile than road construction spending, which has been relatively stable since 2017 and grew at 10% per annum since 2005.

Steel Demand from Railway Sector

• Direct demand from railway (rail, rolling stock) is estimated at 6-7mn tonnes, which is ~1% of China's total steel demand.
• Indirect demand from railway infrastructure (tunnels, over-bridges, stations) adds another 2-3% to steel demand.
• The market may overstate the magnitude of railway-related steel demand.

Citi Research Investment Ratings

• Citi Research provides investment ratings (Buy, Neutral, Sell) and optional risk ratings (High risk).
• Buy rating is assigned if ETR (Expected Total Return) is 15% or more (or 25% for High risk stocks).
• Sell rating is assigned if ETR is negative.
• Neutral is given to stocks not assigned a Buy or Sell rating.
• Catalyst Watch and Short Term Views (STV) are additional ratings indicating near-term price movements due to specific events.
• These ratings are not recommendations and should be used in conjunction with other investment analysis.

Key Information

• Railway spending is a leading indicator of fiscal activity in China.
• The growth in railway spending is expected to surpass previous years and potentially reach a record high in 2025.
• The infrastructure spending subcomponents are detailed in the document, with figures provided for Rail FAI and Rail Road Power FAI growth.
• The document includes important disclosures regarding potential conflicts of interest, analyst affiliations, and the role of Citi Research in the market.
• Citi Research may suspend or revise ratings due to regulatory or internal policy reasons, and this is clearly noted in the rating history.
• The proportion of recommendations over the past 12 months:
  • Q1 2025: Buy 33% (63% of these had investment firm services), Hold 44% (51%), Sell 23% (49%), RV 0.5% (87%)
  • Q4 2024: Buy 32% (64%), Hold 44% (52%), Sell 23% (44%), RV 0.4% (92%)
  • Q3 2024: Buy 33% (61%), Hold 44% (52%), Sell 23% (49%), RV 0.4% (80%)
  • Q2 2024: Buy 33% (61%), Hold 44% (52%), Sell 23% (48%), RV 0.5% (90%)

Analysts Involved

• Ephrem Ravi
• Wenyu Yao
• Jack Shang, CFA
• Krishan M Agarwal
• Tom Mulqueen
• Shashi Shekhar, CFA
• Kenny Xunyuan Hu, CFA
• Shreyas Madabushi
• Ijema Ihuegbu
• Anna Wang

Legal and Regulatory Disclosures

• The report includes analyst certification, important disclosures, and research analyst affiliations.
• Citi Research may have conflicts of interest due to its business relationships with covered companies.
• The report is not intended as a recommendation and should be used as a single factor in investment decisions.
• Non-US research analysts are not registered with FINRA, and may not be subject to certain FINRA restrictions.
• The document also includes regulatory disclosures for various jurisdictions, including:
  • Turkey: Investment information is not within the scope of investment advisory activity.
  • Israel: Not intended for retail clients.
  • Australia, Brazil, Chile, Germany: Specific regulatory entities are listed.
  • U.S.: The Product is made available by Citigroup Global Markets Inc. and is subject to U.S. regulations.

Additional Notes

• Price information is based on the prior day's market close, unless otherwise stated.
• Past performance is not indicative of future results.
• ESG factors are based on public statements and may not be independently verified.
• The investment objective, risks, and fees of any ETF should be reviewed carefully before investing.
• Citi Research may provide different conclusions or recommendations based on the type of research product and client needs.