BEIJING, Jan. 11 (Xinhua) -- Massachusetts Bay Transportation Authority (MBTA) recently decided to buy 134 subway trains from CRRC Corporation Limited (CRRC, 601766.SH; 01766.HK), with the order valued at about 270 million U.S. dollars.
In October 2014, before the merger of China CNR Co., Ltd. and CSR Co., Ltd., the former won the bidding of providing 284 subway trains for Boston with the order valued of 567 million dollars, and it was the first contract a Chinese rail transportation equipment company obtained in the U.S.
A source familiar with matter disclosed the new order is a supplementary purchase of the previous order and only CRRC can provide trains with the same standards, so the MBTA decided not to launch an auction but the purchase is legal.
The trains of the two orders will all be manufactured in CRRC’s factory in Massachusetts. The factory started construction on September 3, 2015 and is expected to complete in 2017.
So far, CRRC have gained two contracts in the U.S. The other one is providing 846 subway trains for Chicago with a contract value of 1.3 billion dollars.
According to CRRC’s development plan for 2016 to 2020, its overseas orders should be doubled from the previous period, which means the value of its overseas orders should reach 15 billion dollars by 2020.
Morgan Stanley’s research report is upbeat about CRRC’s overseas expansion and rates it at overweight. The report says accelerating overseas development will help the company realize business growth. However, Morgan Stanley says to achieve its goal of overseas income proportion reaching 20 percent by 2020 is challenging. Enditem (Edited by Yang Qi, kateqiyang@xinhua.org)
A single purchase
