Event description
Operating income of Hyundai Investment in the first quarter of 2016 rose 6.18% year-on-year to 1.368 billion, gross profit margin decreased 1.89% year-on-year to 22.73%, net profit attributed to the parent company increased 31.61% to 122 million, and the final EPS was 0.12 yuan per share.
Event comment
The traffic flow of the main road sections of Q1 continues to increase. In the first quarter of 2016, the total traffic volume of Tanshan Expressway, Changyong Expressway, Changtan Expressway and Xuhuai Expressway increased by 8.8%, 1.6% and 35.1% respectively compared with the same period last year. Vehicles continued to flow back after the overhaul of Tanshan Expressway, and continued high growth after the connection of Xuhuai Highway. On the whole, the total traffic volume of Hyundai Investment's main road production increased by 6.1% in the first quarter compared with the same period last year, and the main road sections grew steadily.
The adjustment of passenger and cargo structure continued, and unit income decreased. The operating income of the parent company, which is mainly based on road production income, decreased by 0.19% compared with the same period last year, and the gap between flow and income was mainly due to the continuous adjustment of the passenger and cargo structure. In the first quarter of last year, the proportion of passenger traffic was 73.83%; in the first quarter of this year, passenger traffic accounted for 78.18%. Due to the low standard of bus charges, the level of bicycle income decreased in the first quarter.
In the end, with the help of diversified subsidiaries, the company's consolidated revenue increased by 6.18% in the first quarter compared with the same period last year.
Non-operating income is the main reason for the high growth of net profit. In the first quarter of 2016, the company's non-attributable net profit was 81.75 million, an increase of 4.36% over the same period last year. The sharp increase in vested net profit was mainly due to non-operating income of about 48.12 million due to the disposal of land by the parent company and compensation for the renovation of Changtan Expressway, an increase of 47.47 million over the first quarter of last year.
Maintain a "buy" rating. Taking into account the continuous recovery of the company's main highway traffic flow and the continued development of auxiliary industries to provide future space and flexibility, we expect the company's EPS to be 0.57,0.68 and 0.77 yuan respectively from 2016 to 2018, maintaining a "buy" rating.
Risk hint: the income level of Changyong Changtan section has declined again; large losses in bulk trade