The Hangzhou-Shaoxing-Taizhou High-Speed Railway, the first privately-owned high-speed railway in China, is crisscrossing the core city cluster of the Yangtze River Delta and is boosting regional economic development with a passenger flow exceeding 70 million. This landmark national project not only realizes the strategic vision of a "one-hour high-speed rail circle" between Hangzhou and other cities in the province, but also serves as a vivid example of CITIC Financial Assets playing a financial rescue role in the infrastructure sector and contributing to high-quality regional development.
Private capital invests in China Railway Asset Management Co., Ltd. (CRMC) to alleviate liquidity crisis.
In 2017, the Hangzhou-Shaoxing-Taizhou High-Speed Railway was launched using an innovative PPP (Public-Private Partnership) framework. It was among the first batch of demonstration projects for railway investment by social capital, with a large private enterprise leading a consortium that partnered with state-owned enterprises and government departments to jointly promote the project. During the final push for opening in 2021, the COVID-19 pandemic caused a liquidity crisis for some private partners, rendering them unable to contribute capital. The leading private enterprise urgently made the payments and took over their shares, but the huge expenditure placed a heavy economic burden on the company. Meanwhile, after the project opened, how to revitalize the dormant capital, optimize the shareholder structure, and ensure the long-term development of this innovative infrastructure project were also critical issues that urgently needed to be addressed. CITIC Financial Asset Management fully leveraged its professional advantages in non-performing asset management and resource integration capabilities, innovatively utilizing mezzanine investment tools. Through a combination of "equity restructuring + management restructuring" strategy, it effectively alleviated and revitalized the project, strongly guaranteeing the stable operation of the Hangzhou-Shaoxing-Taizhou High-Speed Railway.
Financial empowerment is evolving from a "dual model" to a "three-dimensional ecosystem."
CITIC Financial Asset Management Zhejiang Branch leveraged its counter-cyclical adjustment function, meticulously designing the transaction structure based on in-depth analysis of the project's key issues. Through a three-step approach—"revitalizing the inherited share, optimizing the management model, and facilitating asset securitization"—it successfully broke through the operational difficulties of the first privately-controlled railway. The project not only effectively revitalized the share inherited by the private enterprise and mitigated potential risks, but also upgraded the equity structure of the Hangzhou-Shaoxing-Taizhou High-Speed Railway Partnership from a dual "state-owned-private" model to a three-dimensional ecosystem of "state-owned + private + financial," effectively enhancing the stability of social capital equity and ensuring the project's efficient operation.
Collaborative efforts to create a new model for financial services infrastructure
CITIC Financial Asset Management Zhejiang Branch fully leverages the synergistic advantages of CITIC Group, deeply collaborating with its sister units within the group to provide multi-channel, comprehensive services. The branch, in conjunction with CITIC Securities, actively supports the issuance of REITs, ABS, and other products for projects, constructing a complete closed loop for infrastructure investment encompassing "investment, financing, management, and exit." Currently, the average daily passenger volume of the Hangzhou-Shaoxing-Taizhou High-Speed Railway has increased nearly twofold, from 8,900 at the beginning of its operation to 26,000, effectively driving the socio-economic development of cities along the line and even the Yangtze River Delta region.
With the steady progress of the Hangzhou-Shaoxing-Taizhou asset securitization, this transportation artery is becoming a vivid example of how financial resources can nourish the real economy and serve national strategies. Under the professional operation of CITIC Financial Asset Management, the project has not only overcome its initial difficulties but also explored a sustainable development path to help social capital participate in the construction of new infrastructure, creating a replicable and scalable model for financial asset management companies to empower the infrastructure sector.
