Core ideas:
In the first quarter of 2017, the company achieved operating income of 1.166 billion yuan, an increase of 7.08% over the same period last year, and a net profit of 436 million yuan, an increase of 132.77% over the same period last year. The net profit after deducting non-return was 214 million yuan, an increase of 23.8% over the same period last year. Earnings per share in the first quarter were 0.19 yuan.
Changjiu Expressway Construction, Expressway income slightly reduced
In the first quarter of 2017, the company's toll income was 809 million yuan (excluding the impact of revenue change). Due to the decline in road construction revenue of Changzhang Changjiu Expressway, Changtai and Jiujing Expressway achieved revenue growth of 17.4% and 10.5%. The overall income decreased slightly by 0.51% compared with the same period last year, and the revenue of the non-highway business increased and the main business profit company achieved 1.166 billion yuan. An increase of 7.08% over the same period last year. Due to the slight decline in toll revenue, the increment is mainly provided by engineering business and oil sales business. In terms of cost, the company's operating costs totaled 636 million yuan, an increase of 6.1% over the same period last year, which was lower than the revenue growth rate. In addition, due to the impact of business reform, the company's business tax decreased by 25.76 million yuan compared with the same period last year; due to the reduction in liabilities, financial expenses decreased by 11.65 million yuan compared with the same period last year. Revenue growth and cost control led to a 23.8% year-on-year increase in the company's net profit after deducting non-return.
The subsidy income is slightly higher than expected and constitutes the main profit increment.
During the reporting period, the company achieved a net profit of 436 million yuan, a sharp increase of 132.77% over the same period last year, mainly due to receiving a government subsidy of 278 million yuan, which was not available in the same period last year. We believe that the amount of subsidy is slightly higher than expected, so we have raised our profit forecast for 17 years.
Investment advice: low valuation and steady growth, give buy rating
It is estimated that the EPS of the company in 17,18 and 19 years is 0.37, 0.39 and 0.43 yuan respectively, and the corresponding PE is 14.8X, 14.1x, 12.8X. At this stage, the uncertainty of the company's main business is gradually eliminated, and the performance is in the rebounding channel. PB valuation is significantly lower than the industry average (corresponding to PB is only 0.90 times), and has a certain degree of growth, maintaining the "buy" rating.
Risk hint: toll revenue does not meet expectations; toll policy changes.
