Shenwan Hongyuan Group Co., Ltd. has released a research report indicating that the "15th Five-Year Plan for Coal Industry Development" calls for improving the "West-to-East Coal Transport" and "North-to-South Coal Transport" systems, while accelerating the construction of the "one axis, two wings, multiple connections" rail corridor for Xinjiang coal outbound transport. July saw robust growth in rail freight turnover, and August is expected to bring marginal improvements as downstream power plants enter a coal replenishment cycle. With conventional rail network utilization rates set to climb, the "crowding-out effect" will position the high-speed rail network to absorb more passenger growth and some high-value-added freight demand. The firm believes a major revaluation cycle for core railway assets has begun.

Where the opportunity lies

The National Development and Reform Commission and the National Energy Administration recently published the "15th Five-Year Plan for Coal Industry Development," setting a target for large modern coal mines to account for 87% of national capacity by 2030. The five major coal supply security bases in Shanxi, western Inner Mongolia, central Inner Mongolia, northern Shaanxi, and Xinjiang are expected to contribute over 80% of national output. The plan also emphasizes upgrading transport infrastructure, including the "West-to-East Coal Transport" and "North-to-South Coal Transport" corridors, alongside the new Xinjiang coal outbound rail channel.

July passenger traffic softens amid shorter travel distances

In July 2026, national railway passenger volume reached 452.42 million, down 0.6% year-on-year, while cumulative passenger volume for January-July hit 2.80063 billion, up 4.1%. Passenger turnover for July stood at 165.663 billion passenger-kilometers, a 6.4% decline, with cumulative turnover of 992.345 billion passenger-kilometers, up 1.6%. The peak summer travel season kept absolute passenger numbers elevated, but monthly volume turned negative year-on-year, and turnover declines widened. Extreme weather disrupted travel in July, while long-distance business and cross-regional trips remained weak, further compressing average travel distances per passenger.

Freight turnover strengthens in July, restocking cycle to support August

Rail freight volume in July 2026 totaled 430.47 million tonnes, down 4.7% year-on-year, while cumulative volume for January-July reached 3.05273 billion tonnes, up 1.4%. Freight turnover for July surged 3.9% to 316.175 billion tonne-kilometers, with cumulative turnover of 2.201984 trillion tonne-kilometers, up 6.3%. July freight volume dipped slightly due to weather impacts and a delayed power plant restocking cycle, but turnover outperformed volume as cross-regional commodity transport distances grew structurally. This divergence highlights the increasing strategic value of the national rail network.

Strategic revaluation driven by shifting production bases and rising demand

According to the coal plan, concentration in the Shanxi-Shaanxi-Inner Mongolia-Xinjiang production heartland is set to increase further, supporting sustained high growth in coal transport turnover. The medium-to-long-term energy security value of regional rail networks remains intact. As coal chemical products and containerized white goods gain traction, conventional rail capacity utilization will keep climbing. Under this crowding-out effect, the high-speed rail network will take on a larger share of passenger growth and high-value freight demand.

Investment recommendations and key risks

The firm asserts that a major revaluation cycle for core railway assets has commenced, recommending Daqin Railway and Beijing-Shanghai High-Speed Railway, while monitoring Tielong Logistics, Guangshen Railway, and Xinjiang coal outbound rail assets. In the highway segment, recommendations include Anhui Expressway, Shandong Expressway, and Zhaoshang Highway, with attention to Ninghu Expressway, Zhejiang Expressway, Sichuan Expressway, Dongguan Holdings, Guangdong Expressway, Shenzhen Expressway, and Ganyue Expressway. For bulk commodity intermodal transport, the firm highlights core port operators and carriers such as Jayud Global Logistics. Risks include network diversion, operational safety incidents, and interest rate fluctuations.