According to a research report from Shenwan Hongyuan Group Co., Ltd., total cross-regional passenger traffic in China reached 6.937 billion trips between February 2 and February 28, 2026, representing a year-on-year increase of 5.88% compared to 2025, indicating improved operational conditions for railway and highway sectors. Railway and highway assets exhibit strong "HALO" characteristics, and a strategic medium- to long-term allocation window is now opening. The firm suggests that two main investment themes in the expressway sector are likely to persist throughout the year: the traditional high-dividend investment theme and potential catalysts from market value management initiatives.
Key viewpoints from Shenwan Hongyuan are as follows:
Railway and highway assets demonstrate prominent "HALO" attributes, and a strategic medium- to long-term allocation window has emerged. "HALO assets" refer to those characterized by heavy capital investment, low risk of obsolescence, high barriers (such as regulatory approvals, replication difficulties, and large capital expenditure requirements), and stable cash flows. As typical network-based transportation assets, railways and highways possess strong "HALO" qualities.
Spring Festival travel demand showed a pattern of lower activity early in the period followed by higher activity later, with railway and highway sectors experiencing improved conditions. Data from the Ministry of Transport indicate that from February 2 to February 28, 2026, total cross-regional passenger traffic reached 6.937 billion trips, up 5.88% compared to the same period in 2025. Specifically, commercial highway passenger volume totaled 853 million trips, a year-on-year increase of 5.62%. Non-commercial passenger vehicle travel on expressways and national/provincial highways reached 5.613 billion trips, rising 5.76% year-on-year. Railway passenger volume amounted to 378 million trips, growing 7.43% compared to the previous year.
On the macroeconomic side, long-term bond yields and risk premiums are declining. In the short term, escalating geopolitical tensions overseas have significantly heightened market risk aversion. Against this backdrop, capital is shifting from risk assets to safe-haven assets, leading to lower long-term bond yields and reduced market risk premiums. Concurrently, increased investor expectations of future uncertainty have caused equity risk premiums to fall. As long-term bond yields, which serve as a "pricing anchor," enter a downward trend and overall market risk compensation premiums decrease, the marginal allocation value of high-dividend assets—previously under pressure—has improved notably.
Risk warnings include potential declines in traffic volume, risks related to daily operational safety and production accidents, and interest rate fluctuations.