Investors rushed to buy shares of China's two largest motorcycle manufacturers after the merger deal was approved by the Chinese government, sending their prices sharply higher.

Since the resumption of trading last Tuesday, the share price of China South Locomotive & Rolling Stock Corporation Limited, which is listed in Shanghai, has risen by 58%; during the same period, the share price of China CNR Co., Ltd. has also soared 57%.

The H shares of the two companies listed in Hong Kong have risen even more, with a cumulative increase of more than 70% in the past week, mainly due to the funds of mainland investors pursuing these two stocks through the Shanghai-Hong Kong Stock Connect mechanism.

China South Locomotive & Rolling Stock Corporation is the world's largest electric locomotive manufacturer.

Investors have been seduced by China's plans to export high-speed rail technology to the rest of the world, particularly through its ambitious One Belt, One Road initiative.

The Belt and Road Initiative is intended to connect China with Central Asia and Europe.

The combined company, which will be called CRCC Corporation, will allow China to compete more efficiently with rivals from Japan and Europe.

While both companies' shares are trading sharply higher, there may be a more attractive valuation path for investors to capitalize on China's rail growth opportunities.

Zhuzhou CSR Times Electric Co., Ltd. (Zhuzhou CSR Times Electric Co., 3898.HK, referred to as: CSR Times Electric) is an indirectly owned subsidiary of China South Locomotive & Rolling Stock Corporation. The company is engaged in the design and manufacturing of high-speed train power systems.

Some subsidiaries of China CNR have listed CSR Times Electric as a supplier, which shows the quality of its products.

Once the merger of CNR and CNR is completed, CSR Times Electric will have the right to acquire CNR’s subsidiaries engaged in the same business as it.

Morgan Stanley analyst Kevin Luo said this could increase CSR Times Electric's net profit by 30% within three years, exceeding the 15%-20% earnings growth expected after the merger.

While it may benefit more than CSR and CNR, CSR Times Electric's share price has underperformed the latter two.

China South Locomotive & Rolling Stock Corporation and China CNR's H shares have both risen more than 70% in the past week, while CSR Times Electric has only risen 13%.

The current stock price of CSR Times Electric is about HK$59.9, with an expected price-to-earnings ratio of 21 times, which is lower than the price-to-earnings ratio of 26 times for China CNR H shares and 28 times for China South Locomotive and Rolling Stock Corporation's H shares.

As of today, CNR's combined market value exceeds US$110 billion, surpassing Boeing (market value of US$107.9 billion), the world's largest aircraft manufacturer.

In 2014, CNR's total revenue was 224 billion (USD 36.5 billion), net profit was 10.8 billion (USD 1.76 billion), and orders on hand were 248 billion (USD 40.4 billion).

Boeing's revenue was US$90.8 billion, net profit was US$5.45 billion, and orders on hand were US$487 billion.