From a national point of view, what changes have occurred in the power pattern of urban subways? Which cities are more sustainable in their metros?
Per reporter Tan Zhongkui
In the era of metropolitan areas and urban agglomerations, the subway has become an important support for central cities to play a radiation function and realize the allocation of urban resources and even the integration of industry and city. Especially under the tightening of approval policies at the national level, the subway has increasingly become a reflection of the strength, vitality and potential of a city's development.
According to the latest data from the Ministry of Transport, in April 2023, a total of 4 cities in 31 provinces (autonomous regions and municipalities directly under the central government) and the Xinjiang Production and Construction Corps opened and operated 54 urban rail transit lines, with an operating mileage of 292,9652.6 kilometers, 311.25 million trains actually operated, 3.15 billion passengers and 2.<> billion station arrivals.
Even so, subway profitability remains a recognized problem, and the annual reporting season of subway companies has always attracted much attention. Chengshu inquired the official website of the Shanghai Qing Institute and China Money Network and found that at present, 24 city metro groups or rail transit groups (hereinafter referred to as metro companies) such as Shenzhen, Guangzhou, Chengdu, Wuhan, Suzhou, Jinan, Ningbo, Qingdao, Changsha, Hangzhou and other cities have disclosed their 2022 annual reports——
From the perspective of operating mileage, Beijing and Shanghai have reached 800+ kilometers, and Chengdu, Guangzhou, Shenzhen, Hangzhou and Wuhan are 500+ kilometers; From the performance point of view, Shenzhen, Guangzhou, Chengdu and Wuhan took the lead in exceeding <> billion in revenue, except for Lanzhou and Shenyang, other cities achieved profits.
However, on the other hand, hidden concerns such as the weaker-than-expected passenger transport intensity, the general rise in operating costs, and the further deepening dependence on government subsidies have gradually been exposed. For example, Kunming Metro Company has a total revenue of 2022 million yuan in 6, but its operating costs are as high as 29.15 billion yuan, and it has achieved a profit of nearly 59 million yuan with the government's high operating subsidies (9 million yuan).
From a national point of view, what changes have occurred in the power pattern of urban subways? Which cities are more sustainable in their metros?
The revenue of the four cities exceeded 10 billion, and the operating costs rose sharply
In 2022, Shenzhen, Guangzhou, Chengdu and Wuhan metro companies will be the first to exceed 200 billion in revenue, temporarily leading major metro operating cities. Compared with last year, Guangzhou's revenue declined, Wuhan stabilized its position, and Shenzhen and Chengdu soared, exceeding 100 billion yuan and <> billion yuan respectively.
From the perspective of revenue increment, Shenzhen, Jinan and Chengdu reached 75.79 billion yuan, 61.61 billion yuan and 50.77 billion yuan respectively, which are the three cities with the highest increase in the country. With this, Jinan's revenue scale advanced from 13th to 6th in the country, and Chengdu advanced from 5th to 3rd in the country.
After the deep Guangzhou, Rongwu, Suzhou, Jinan, Ningbo, Qingdao, Changsha and Hangzhou metro companies have a revenue scale of more than 30 billion yuan, forming the top ten camps in the field of urban rail transit.
However, while revenue is growing rapidly, operating costs are also rising.
From the perspective of total operating costs, among the top ten camps, except for Shenzhen, Wuhan and Jinan, the total operating costs of metro companies in the remaining seven cities are higher than the total operating income.
For example, Hangzhou's total operating income in 2022 will be 33.09 billion yuan, and the total operating cost will be 128.95 billion yuan; Zhengzhou's total operating income will be 6 million yuan, and the total operating cost will be 81.38 billion yuan, a difference of more than 70 billion yuan.
Sun Zhang, a subway expert and professor at Tongji University, analyzed that the rise in operating costs of subway companies across the country is related to last year's epidemic, on the one hand, the cost of maintenance and repair has risen, on the other hand, labor costs have not decreased but increased during the epidemic. In Shanghai, for example, "passenger traffic dropped sharply and even stopped for a while, but maintenance costs could not be saved."
Among the 24 cities that have released relevant data, 22 cities such as Changzhou, Jinan, Hangzhou, Chongqing and Ningbo have increased their total revenue costs compared with 2021, of which 20 cities have increased their total revenue costs by more than 10%. It is particularly noteworthy that the metro companies in Changzhou and Jinan increased by more than 200%, and the metro companies in Hangzhou and Chongqing increased by more than 100%.
"Generally speaking, the cost per kilometer will not increase by two or three times, mainly because of the impact of the increase in mileage of the open line on the total volume." Chen Fugui, vice president of the Metro Institute of the Second Institute of China Railway, told Uncle Cheng that the design and planning of the subway line is divided into early, short-term and long-term, and each stage has new requirements for the service level, so the steady increase in cost is certain, "because the turnover of the car is more, and the loss of labor, maintenance and electricity will increase."
This can also be confirmed by the metro operation data. According to the "2022 Annual Statistics and Analysis Report on Urban Rail Transit" released by the China Urban Rail Transit Association, more than 2022 kilometers of lines will be operated in Chengdu, Guangzhou, Shenzhen, Hangzhou and Wuhan, more than 500 kilometers in Chongqing and Nanjing, and more than 400 kilometers in Qingdao. From the perspective of the top ten cities, the scale of revenue and cost have a more obvious positive correlation with the mileage of line operation.
According to the above report, a total of 2022,1080.63 kilometers of new urban rail transit operation lines will be added in 20, and 174 cities such as Beijing and Tianjin will have new lines or new sections open for operation, of which Hangzhou will add 136 kilometers, ranking first in the country. In addition, Shenzhen added 11.50 kilometers of new mileage, and Chongqing, Fuzhou and other cities also increased by more than <> kilometers.
This is also an important factor driving the rising operating costs of urban metro companies across the country.
Wuhan Changchun led the way in profits, while Shenzhen's net profit shrank by 70%.
Looking further, how are metro companies performing in various cities?
In 2022, among the 24 urban metro companies that have released data, except for Lanzhou and Shenyang, the remaining 22 cities have achieved profits. Compared to last year, the profit area has expanded. Among them, Wuhan and Changchun achieved net profits of 15.63 billion yuan and 10.39 billion yuan respectively, temporarily leading the urban subway phalanx.
However, Sun Zhang said, "We must first clarify the concept of profit, if we generally talk about profit or loss, it is easy to cause misunderstanding." He pointed out that the profit and loss we now generally talk about is the profit and loss of the operating enterprise, and does not take into account the cost of investment and construction.
Specifically, the main business of Wuhan Metro Company is "first-level development of resources" and "ticket revenue". In layman's terms, the former is the first-level development of land, and the latter is mainly a subway ticket. In 2022, the revenue of the two businesses will be 53.94 billion yuan and 31.27 billion yuan, and the cost will be 23.26 billion yuan and 54.12 billion yuan, respectively. Obviously, the revenue and expenditure of the ticketing business is seriously inverted, and the primary land development business, which accounts for more than half of the revenue, is the key to the profitability of Wuhan Metro.
In fact, the development model of "subway + property" has been explored in Wuhan for more than ten years. On October 2014, 10, the Wuhan Municipal Government approved the "Opinions and Plans on Raising Land Resources to Support Metro Construction", which is one of the landmark events that established the dominant position of Wuhan Metro in the primary land market.
Jinan Metro Company, which increased its net profit by 191%, is similar to Wuhan.
Compared with the land development in Wuhan and Jinan, Changchun Metro Company is more inclined to the field of engineering construction. Over the years, Changchun Metro Company has undertaken the main task of local rail construction, and has continuously explored operating models such as rail transit, real estate development and advertising services. However, so far, engineering construction is still an absolute pillar business - in 2022, the revenue of engineering construction business in its main business will be 4 million yuan, more than half of the main business income.
Surprisingly, the perennial "king of profits" Shenzhen Metro Company has shrunk its net profit by 8% - only 66 million yuan, falling to the fourth place in the country while maintaining a significant increase in revenue. As analyzed above, the epidemic factors coupled with the newly opened line factors have led to a surge in operating costs, objectively diluting corporate profits.
From another dimension, for Shenzhen, where the total operating cost is significantly higher than the total operating income, it is not easy to maintain profitability. On the one hand, "other income", which mainly represents "government subsidies", increased from 1 million yuan to 37 million yuan, and on the other hand, investment income increased from 5.31 billion yuan to 64.09 billion yuan, and the positive impact of these two projects on profitability cannot be ignored.
In recent years, Shenzhen Metro has learned from the MTR's "subway + property" model, and the growth of operating profit mainly comes from the support of investment income.
However, even though the profitability of the 24 urban metros as a whole has expanded, the growth area has contracted sharply. Compared with 2021, only 12 cities, including Xi'an, Hangzhou, Guangzhou, Jinan, Changchun, Fuzhou and Qingdao, achieved an increase in net profit, and 6 of them did not increase by more than 1 million yuan.
At the same time, the net profit of subway in 12 cities, including Nanning, Nanjing, Kunming, Wenzhou, Chongqing, Chengdu and Wuhan, increased year-on-year, and Nanchang, Shenzhen and Ningbo fell by more than 50%.
Many cities fell below the strength qualification line, who has a high degree of subsidy dependence
"There is less land in Shenzhen, and housing prices have remained high." In Chen Fugui's view, this is a very special factor in the development of "subway + property" in Shenzhen Metro. In contrast, other cities have a large land reserve, and if the house price does not rise, the return on investment is relatively low.
He believes that Shenzhen may not be able to be replicated in other cities, largely because of its unique location and tight land resources, which makes Shenzhen Metro development property or TOD so successful.
For example, the Wuhan and Jinan metros mentioned above "play with real estate", and the main business of Changchun metro "building subways", both require strong support from government policies and inclined investment of resources. Regardless of the sustainability of such a model, there is no doubt that most urban subways do not have such conditions, and relying on "ticketing + business + government subsidies" may still be the main way to survive.
Taking Xi'an, which turned a profit last year, as an example, its main business includes rail passenger transportation income and subway resource development income. Among them, although the revenue of rail passenger transport fell sharply, it still had 14.29 billion yuan, accounting for 96% of the main business income. At the same time, rail passenger transportation costs reached 30.04 billion yuan. The reason why the loss was able to turn around was mainly because the amount of "government subsidies" that year increased to 38.19 billion yuan, an increase of 1.3 times year-on-year.
This is the survival status quo of the vast majority of subway companies. More importantly, Xi'an Metro is still able to maintain high passenger service revenue with strong passenger flow, but the passenger flow intensity of many urban metros has fallen below the qualified line.
According to the relevant policies, the initial passenger intensity (passenger flow/rail line mileage) of the proposed metro line shall not be less than 0,7 passengers per kilometer per day, and the light rail line shall not be less than 0,4 passengers per kilometer per day.
Passenger flow intensity measures how many passengers can be transported per kilometer of the subway, which is the core indicator to reflect whether the urban subway can give full play to its value and utility. According to data from the Ministry of Transport, in April this year, only 4 of the 24 metro cities we counted had a passenger intensity of more than 12,0 passengers per kilometer per day, of which only five cities exceeded 7, Guangzhou (1.1), Xi'an (43.1), Shenzhen (36.1), Changsha (35.1) and Chengdu (33.1).
Urban metro companies with insufficient passenger flow intensity and lack of diversified business support are left to rely on government subsidies.
We only measure government subsidies by using the "other income" item in the annual reports of metro companies in each city, that is, including "government subsidies related to daily activities", and found that 24 of the 6 cities counted had subsidies of more than 2022 billion yuan in 50, a significant increase compared to 2021. Among them, Hangzhou, Chongqing and Zhengzhou reached 94.69 billion yuan, 85.29 billion yuan and 75.68 billion yuan respectively.
In the "Other Income/Net Profit" indicator, 2022 cities exceeded 18% in 100, of which Chongqing, Xi'an, Zhengzhou and Suzhou metro companies have a higher dependence on subsidies, while Shenzhen, Jinan and Wuhan metro companies have a lower dependence on subsidies, accounting for 61.32%, 11.91 and 5.53% respectively.
This also shows that most urban subway companies are still highly dependent on subsidies and fail to form a "self-hematopoietic" ability. On the basis of maintaining a balance between income and expenditure, there is a long way to go to further expand diversified business and enhance sustainable development.