Renta 4 | Talgo has informed the CNMV (Spanish National Securities Market Commission) that it has been awarded a contract by the Saudi Arabian government for the manufacture and maintenance of 20 new high-speed trains for the Haramain High-Speed Railway project.
The new contract is worth €1.332 billion, bringing Talgo’s order book to a record figure of approximately €6 billion.
The 20 new units will be produced with the same technical requirements as the series of 35 trains previously manufactured by Talgo and operating in the country since 2018.
In addition, the maintenance contract period for the entire fleet (the 36 existing units and the 20 new ones) has been extended and could run until 2038.
Assessment: VERY POSITIVE news. The award raises the order book to historic levels, increasing revenue visibility for the coming years and reinforcing the confidence of a strategic customer.
We view the long-term extension of the maintenance contract for the entire fleet positively. This is a business with higher and recurring margins, which brings great stability and quality to the company’s cash flow.
This contract consolidates Talgo’s technological leadership position in the very high-speed segment and strengthens its position in the Middle East, a key region with strong investment plans in railway infrastructure.
We maintain our recommendation and Target Price Under Review.
