China Railway Group Ltd, one of China's leading heavy infrastructure companies,

said Friday its net profit in 2011 fell 9.55 percent year-on-year to 6.69

billion yuan ($1.1 billion).

The Beijing-based company attributed its poor performance to the sluggish

infrastructure building market in China, according to China Railway's annual

report filed with the Shanghai Stock Exchange.

The company's business revenues dipped 2.75 percent year-on-year to 460.72

billion yuan, while its earnings per share stood at 0.31 yuan, down 11.43

percent from a year earlier.

Last year, China Railway signed new contracts worth 570.8 billion yuan, down

22.4 percent from the year before.

The company's accounts receivables rose 18.26 percent year-on-year to 96.34

billion yuan as owners of some projects ran short of funds and payment were

delayed, according to the report.

The Chinese government decided to slow the development of high-speed rail and

put speed limits on the existing express ways after a fatal high-speed train

crash left 40 people dead in the eastern city of Wenzhou in July last year.

CSR Zhuzhou signed a contract to supply 23 six-car trains for the future Wuxi

metro Line 1 on March 21. Deliveries are scheduled to run from March 2013 to

June 2014, when trial running on the 30·5 km line is scheduled to start.

The Type B trainsets will have friction-stir welded aluminium alloy bodies, and

according to the manufacturer they will meet European standards for fire

protection, thermal insulation, vibration and noise reduction. They will have a

design speed of 80 km/h, with redundant onboard systems for reliability.

In additional to a low energy lighting system, the trainset will be equipped for

regenerative braking to reduce power consumption and the amount of brake dust

produced. The capacity of a six-car set is put at 1 846 passengers.

The city of Wuxi in Jiangsu province has a population of around 7 million. It is

planning to develop five metro lines totalling 157·8 km with 111 stations.

More than 80 percent of the suspended railway projects are recommencing after

funds worth almost 50 billion yuan ($7.94 billion) have been put in place, China

Business News reported Tuesday, citing railway expert Wang Mengshu.

"At least 40 billion yuan's worth of loans from banks can be guaranteed," said

Wang, "the current amount of raised money is not bad in terms of the resumed

railway projects."

But since a gap of more than 20 billion yuan still exists, a few less important

projects have to be shelved to ensure the completion of key railway lines, he

warned.

"In fact, 80 billion yuan is annually needed to maintain the construction rate

specified in a revised state blueprint on railway networks in 2008," Huang said.

Last August, seven large construction groups urged the central government to

take nationwide railway stoppages seriously in a joint statement submitted to

China's State Council, the cabinet.

In late September 2011, the State Council asked the National Development and

Reform Commission, China's top economic planner, to seek solutions for the

financial difficulties in railway construction.

From October to November, the Ministry of Railways was financed over 20 billion

yuan and raised another 7 billion yuan after issuing construction bonds for

three consecutive times in a month.

"Despite some relief from financial distress in 2012, it is imperative to reform

the railway system in China considering its fluctuations in the recent years,"

warned an analyst from Huatia United Securities, who declined to be named.

China's CSR Corp, whose parent made the trains involved in a deadly crash last

year, said on Tuesday it had won 3.3 billion yuan (S$656 million) in orders that

include supplying the Beijing metro.

Among the four orders, the company will also supply carriages to Hong Kong's

MTR, which operates the rapid transit railway in the former British colony, CSR

said in a statement to the Hong Kong stock exchange.

The company is listed in both Hong Kong and Shanghai. Other contracts include

the sale of metro trains to the eastern city of Wuxi and an order for freight

cars for a domestic port company, it said.

The parent of the company - state-owned CSR Group - made the bullet trains

involved in a collision near China's eastern city of Wenzhou last July, which

killed at least 40 people and injured hundreds.

The Chinese railway authority is planning to establish a face recognition system

at three railway stations along the Beijing-Shanghai high-speed railway to

assist the police in catching criminals, China Business Radio reported on

Sunday.

The three railway stations are Shanghai Hongqiao Railway Station, Tianjin West

Railway Station and Jinan West Railway Station. The opening of bids starts on

April 20.

The system, which is to be installed at a station's security check area, is

believed to be able to screen a criminal's face even after a cosmetic surgery.

China has widely employed the face recognition system. At least 100 criminal

suspects had been detected one month after the system was put into operation in

2006 in Beijing Railway Station and Beijing West Railway Station. The system has

also been used in many other public security fields including at the 2008

Beijing Olympic Games, Beijing Capital International Airport, hospitals and exam

centers.

Researchers say they are also working on movable cameras that will be added to

upgrade the system to screen faces at different angles.

China South Locomotive and Rolling Stock Corporation Ltd. (CSR) announced

Tuesday that it has secured a 1.36-billion-yuan order (216.2 million U.S.

dollars) from Hong Kong, for the provision of high-speed trains.

The CSR will supply high-speed trains to Hong Kong Mass Transit Railway (MTR)

for the Guangzhou-Shenzhen-Hong Kong Express Rail Link which is expected to

enter service in 2015, said a CSR statement.

The awarding of this contract marks the first time the Chinese mainland will

deliver its high-speed trains to Hong Kong.

Based on CSR's CRH380A model, the trains will be customized according to MTR

requirements, the CSR said.

Each train will have eight compartments and can run at a maximum of 380

kilometers per hour.

Delivery of the first train is expected for 2013.

Beijing is planning to decorate 58 new subway stations with unique styles of

public art, including on uncompleted lines 6, 8, 9 and 10, said Beijing

sculpture office yesterday.

"The designers have started going to construction sites to work out specific

plans. The station decoration will be completed as each line is ready to open to

the public," said Yu Huayun, director of Beijing City Sculpture Construction and

Management Office.

"Although we haven't decided the exact themes and elements for each station yet,

the design will embrace the features of Beijing," said Yu.

The most important principle for decorating the stations is to be as close to

the style of the above ground areas as possible, said Yu.

"Like at Olympic Forest Park station, there's the steel grid ceiling over the

platform which closely resembles the structure of the Bird's Nest above," said

Yu.

"However, we won't decorate the stations at Gulou [Drum Tower] or Nanluoguxiang

in a very modern style, but will bring in traditional elements," noted Yu.

The Central Academy of Fine Arts (CAFA), China Mural Association and Beijing

Jingzhi Culture and Arts Company have all won contracts to decorate the

stations.

Huo Xinghai, a student at CAFA who helped design Line 6 stations, said he wanted

to keep the colors and style "bright and neat." He said that designers involved

with the project were asked to provide commuters with pleasant and diverse

visual experiences.

"It's underground space for large numbers of people commuting in a packed place,

so it should be bright enough for people to distinguish the exits to get out or

transfer fast," said Huo.

For the sake of space-saving on the often crowded subway platforms and tunnels,

medallions and reliefs were off the list for wall decorations, said Huo.

"We considered them for a while but the tunnels are pretty narrow at some

stations, so there are safety concerns to put first," said Yu.

"But we do understand few people might pay attention to the arts and decoration

at stations in the busy subway system," said Yu.

For some commuters though, an attractive station does bring some relief to an

otherwise boring commute.

"I was impressed by the frescos at Xizhimen Station, and the entrance of

Beitucheng Station is shaped like a Chinese porcelain vase; they're beautiful,"

said Lin Yuanyuan, a regular subway rider, "and I look forward to seeing more

subway art."

Central China's city of Wuhan will open its first subway line by the end of this

year to ease traffic pressure, local authorities said.

The first phase of Wuhan's Line 2 subway will cross under the Yangtze river,

connecting the city's Wuchang and Hankou districts.

"Tunnels linking all 21 of the line's subway stations have been built and

construction on the stations' main structures has been finished," said Ma

Junrui, vice general manager of the Wuhan Subway Group.

As a key transportation route in Wuhan, the line will handle half of the city's

cross-Yangtze traffic flow, easing gridlock on bridges over the country's

longest river. It is expected to transport at least 600,000 passengers daily by

2015.

Building the line will cost a total of 14.9 billion yuan (2.37 billion U.S.

dollars).

Wuhan lies at the intersection of the Han and Yangtze rivers. Its city proper is

divided into three areas by the rivers.

Wuhan will build more subway lines over the next five years, bringing the total

length of its subway to 180 km, officials have said.

China South Locomotive and Rolling Stock Corp Ltd, one of the two largest high-

speed train producers in China, said its overseas orders will increase

substantially this year as overseas demand for its products outstrips domestic

demand.

The company, also known as CSR, said its overseas orders have not been affected

by the high-speed train crash that occurred near Wenzhou, Zhejiang province,

last year. It expects to see its orders increase by at least 50 percent in 2012,

said a senior CSR official, who declined to identify himself.

The company predicted that 20 percent of its revenue will come from overseas by

2015, up from 8 percent in 2011.

CSR Zhuzhou Electric Locomotive Co Ltd, a CSR subsidiary, recently won a bid to

supply 20 sets of light rail vehicles to Malaysia's AMPANG (AMG) Line Extension

Project, which will extend one of the two lines in the Kuala Lumpur Rail Transit

System network.

China will see several countries, including the US, Russia and India, outpace it

this year in railway expansion. As a result, CSR is trying to move faster into

the overseas market.

It is now talking with its partners in Europe, North America and Australia about

the possibility of acquiring new technology and reducing its dependence on the

domestic market.

"We are looking for companies that will strengthen our technology," Bloomberg

reported, quoting CSR Chairman Zhao Xiaogang.

"Companies in developed countries are experiencing some difficulties and are

willing to sell their assets."

CSR's 2011 profits increased by 50 percent year-on-year to reach 5 billion yuan.

Meanwhile, its competitor, China Northern Locomotive and Rolling Stock Industry

Corp, also reported a 50 percent year-on-year increase in profits in 2011,

saying it had 3.2 billion yuan in profits that year. Its overseas revenue

increased by 40 percent that year, even though it gets only 10 percent of its

total revenue from that source.

China Northern Locomotive has supplied freight trains to Australia, New Zealand,

France, as well as to countries in Central Asia and South America. Apart from

trains, the company recently exported control system technology to Bangladesh.

On July 23 last year, two high-speed trains crashed on a line near Wenzhou,

killing 39 people. The accident was caused by serious signal malfunctions, and

CSR has denied that its trains were to blame.

China plans to spend 400 billion yuan ($63.4 billion) this year on railway

projects. That was down from 469 billion yuan in 2011 and from more than 700

billion yuan in 2010, a sign that the country is fine-tuning its railway

industry.

Plans now call for the country to have 120,000 kilometers of railway tracks by

2020, up from 91,000 kilometers in 2011. According to CSR's estimate, China will

have 100,000 kilometers of railway tracks by the end of 2012.

One of China's biggest online travel agencies will soon begin selling Taiwan

high speed rail passes asthe island prepares to welcome more independent Chinese

tourists.

Ctrip.com, which provides discounted travel services to over 14 million members,

will cooperate with Taiwan's ezTravel in offering the high speed rail pass to

"tap into the market of individual travelers to Taiwan," the report said.

Chinese nationals can already book the pass through a number of travel agencies,

according to Taiwan High Speed Rail Company (THSRC), and Ctrip.com will give

consumers an additional online outlet through which they can buy the pass.

The three-day and five-day passes, priced from 525 Chinese yuan (US$83.15),

allow ticket holders to take trains on the high-speed rail line within the

designated time periods as many times as they want and between any of its eight

stations, the report said.

The pass, which offers passengers savings of roughly 30-50 percent from regular

fares, is available to all foreign nationals who reside outside of Taiwan, the

company said.

The Free Independent Traveler (FIT) program, which is currently restricted to

residents of Beijing, Shanghai and Xiamen, will be open to people who live in

Tianjin, Chongqing, Nanjing, Guangzhou, Hangzhou and Chengdu beginning April 28,

the Mainland Affairs Council said earlier this month.

Travelers from Jinan, Xian, Fuzhou and Shenzhen will also be allowed to visit

Taiwan without having to be part of a tour group sometime this year, the council

said.

A total of just over 56,000 Chinese had traveled to Taiwan under the program

between late last June and March 26, 2012, representing only about 40 percent of

the available quota, according to Taiwan's Cabinet-level Tourism Bureau.

But Taiwan is hoping that the numbers will pick up with residents of more

Chinese cities soon becoming eligible for the program.

China has signed a contract to provide high-speed trains to Bangladesh in a deal

that marks the first time for the export of China-made high-speed rail

technology.

Under the contract, China CNR Corporation Limited will assemble 20 high-speed

trains with a total of 60 cars for Bangladesh. The terms also require China to

supply 20 network control systems, 40 traction inverters and 40 auxiliary

inverters.

The deal is the first under which China will export its self-improved network

control systems and traction inverters after a long period of innovation and

improvements to high-speed train technology it originally imported. The move

indicates that China is able to compete in the area of high-speed rail

technology in the international arena.

Network control and traction systems are core high-speed train technologies.

Traction systems determine a train's stability and carrying capacity, while

network control systems direct the operation of the trains.

Province, at the Changsha South Railway Station in Shangsha, capital of

central China's Hunan Province, April 1, 2012. The high-speed railway from

Wuhan, capital of central China's Hubei Province, to Guangzhou, capital of south

China's Guangdong Province, was connected to the existing high-speed railway

linking Guangzhou with Shenzhen. With the opening of the new route on Sunday,

passengers only need to spend over four hours travelling from Wuhan to Shenzhen

by the bullet train.

At 10 AM April 5, CSR Zhuzhou Locomotive Co., Ltd. CSR Zhuzhou received a notice

of award that it had won the bid for 20 light rail trains 120 carriages for

“Ampang Line” in Malaysia, marking CSR Zhuzhou’s market position in the ASEAN

has been further consolidated.

Under the contract, the first train will be delivered in 33 months and all

trains will be delivered in 51 months. According to sources, the bid for

“Ampang Line” light rail project attracted five domestic and foreign renowned

companies, and CSR Zhuzhou outperformed other bidders by advanced technologies

and quality and convenient services.

CSR Zhuzhou was acknowledged by Malaysia’s owner due to the high-efficiency

implementation of Malaysia’s intercity EMU project. Despite high quality

requirements and short delivery period of the project, CSR Zhuzhou pooled

superior resources and honored the contract by its strong technical R & D,

manufacturing and supply chain platforms, thus significantly enhancing its

ability to perform contracts for international projects and overseas reputation.

It is learned that Malaysia’s intercity EMUs have attracted several ASEAN

owners for field investigations since going into operation on March 8. Early

this year, CSR Zhuzhou’s warranty base in Malaysia reassured ASEAN owners.

“Ampang Line” is a line in the light and rapid transit system in the Klang

Valley in Kuala Lumpur, which stretches 27 kilometers from south to north and

consists of two lines and 25 stations. Malaysia’s rail transit system is

dominated by meter-gauge rail, while “Ampang Line” is Malaysia’s first

standard rail line.

According to a technical expert with CSR Zhuzhou, as the “Ampang Line” project

won by the company is critical of indicators such as train safety and comfort,

the company will customize system solutions to the customer. The train has a

maximum designed transport volume of 1,308 passengers, a speed of 80km/h and a

minimum turning radius of 40m.

Aiming at the special environment with a dense population, steep slope and a

small turning radius, CSR Zhuzhou will use nationally original and independent

technology of vehicle hinging to make the train zigzag through small corners

steadily. The technology has been successfully applied and verified on light

rail vehicles in Izmir, Turkey. The specially designed hydraulic braking system

will make braking safer, agiler and faster. Careful technical personnel also

fully considered Malaysia’s tropical marine climate, and gave anti-corrosion

and dehumidification treatment to every equipment and component of the train.

According to the person in charge of the project, unlike previous overseas

projects, some of the light rail trains for “Ampang Line” will be assembled in

Malaysia, whereby CSR Zhuzhou will accomplish overseas localization for the

first time.

Malaysia’s choosing CSR Zhuzhou again after the intercity EMU project in Kuala

Lumpur shows we are trustworthy, said Xu Zongxiang, executive director and

general manager of CSR Zhuzhou, adding “Ampang Line” light rail project will

further promote the establishment of CSR-ASEAN Rail Vehicle Manufacturing Center

on the basis of the intercity EMU project, and CSR Zhuzhou will take the

opportunity to quicken its pace of globalization, expand overseas operations and

provide more product choices to the international market.

Shares of China CNR Corp, the country's second-largest train maker, gained

after media reported that Bangladesh will purchase key high-speed rail

technologies from the company's subsidiary.

As of 11 am, the company's stocks had climbed 0.97 percent to 4.15 yuan (66

cents) per share on the Shanghai Stock Exchange.

China CNR Corp's Dalian Electric Traction Research and Development Center will

export traction inverters and network control systems to Bangladesh, according

to the reports. This will be the first time for China to export its own traction

and network control systems, which are key technologies of such trains,

according to a Beijing Times article.

The contract contains 20 sets of high-speed rail network control systems, 40

sets of traction inverters and 40 sets of auxiliary inverters, the newspaper

said without mentioning how much the contract is worth.

China CNR is scheduled to release its financial report on April 28. It said in

January that it expected to see its net profit surge over 50 percent in 2011

from a year earlier, on China's booming railway and metro construction.

The profit estimate came despite the company's recall of a raft of trains after

a deadly accident last summer.

On July 23 of 2011, a high-speed train slammed into a stalled train near the

city of Wenzhou in the eastern province of Zhejiang, leaving 40 dead and 172

injured.

The company recalled 54 trains it supplied for the high-speed rail between

Beijing and Shanghai three weeks later. All the trains resumed service in

December after modifications and repeated tests, according to the Ministry of

Railways.

China Railway Group (HKG:0390) has been upgraded to a Must Own China Equity at

Heffernan Capital Management and Economist Shayne Heffernan has placed a $6HKD

price target on the stock for 2013.

China Railway is confident of attracting 650 billion yuan (HK$799.5 billion) in

new contracts this year by focusing more on its non-core railway business.

The mainland’s leading heavy infrastructure company won three metro

construction contracts in Shenzhen, Kunming and Chengdu, which together

contributed 86 billion yuan in the first quarter of this year.

Contracts from the metro sector are expected to grow to 150 billion yuan from 15

billion yuan last year.

“The impact from shrinking investments in domestic railway construction will be

limited to the first half of the year,” chairman Li Changjin said.

Net profit fell nearly 10 percent to 6.69 billion yuan last year. A slowdown in

the industry is expected this year after authorities cut railway spending.

However, considering the stable first quarter, Li expects revenue to exceed the

firm’s original target of 431 billion yuan.

China Railway Group Limited is engaged in infrastructure construction, survey,

design and consulting services, engineering equipment and components

manufacturing property development, and other businesses.

The Company operates its businesses through infrastructure construction, which

includes railway construction, highway construction, urban rail transportation

and other construction; survey, design and consulting services business, which

involves in provision of survey, design and consulting services for railway,

bridge and tunnel projects; engineering equipment and component manufacturing

business, which provides large bridge steel structures and passenger line

turnout; property development business, and other business.