Company profile: one of the leading road passenger transport companies in Xinjiang
Dexin Transportation is a professional road passenger transport company with the longest history and wide coverage in Xinjiang. By the end of June 2016, the company had 109 domestic passenger lines, 11 international passenger lines, 383 passenger vehicles and 3 passenger bus stations. In the first half of 2016, the company's road passenger transport business and passenger bus station business income accounted for 78.56% and 10.30% of the company's operating income, respectively.
Industry analysis: road transport occupies a leading position in Xinjiang's comprehensive transportation system.
The opening of railway lines in Xinjiang has had an impact on passenger line transport, while residents in areas affected by riots and terrorism have reduced their willingness to travel, resulting in a decline in road passenger traffic in Xinjiang since 2014. In spite of this, road transport still plays a leading role in passenger transport in Xinjiang, accounting for more than 94% in 2006-2014. The Transportation Department of the autonomous region predicts that during the 13th five-year Plan period, Xinjiang's position as a channel and hub in the "Silk Road Economic Belt" will become increasingly prominent, and the scale of transport demand will continue to expand.
Company analysis: significant location advantage, leading technical level
As the leading enterprise in Xinjiang passenger transport market, the company's competitive advantages are mainly reflected in: 1) the company operates three passenger bus stations: Urumqi bus Station, Urumqi International Transport bus Station and Wucaiwan passenger bus Station. Urumqi, as the window of Xinjiang, is in a strategic position in Xinjiang transportation. 2) there is an ample supply of natural gas in Xinjiang. Since 2011, the company began to introduce gas vehicles to update the original fuel vehicles, and the renovation project has greatly reduced fuel costs. During the reporting period, the return on net assets of the company is much higher than that of other listed companies in the same industry.
Fund-raising projects and profit Forecast
This fund-raising project includes the Wucaiwan secondary passenger station project and the natural gas bus renewal project. It is predicted that the operating income of the company in 2016-18 is 265 million yuan, and the net profit belonging to the parent company is 50270.51 yuan, respectively, and the corresponding EPS is 0.38 billion yuan. The average PE of comparable listed companies is 39.1 times, the reasonable price of the company is 14.74yuan, and the average PB of comparable listed companies is 3.2times, and the reasonable price of the company is 9.66yuan. Taking all things into consideration, we judge that the reasonable price of Dexin delivery is in the range of 9.66-14.74 yuan.
Risk tips: worsening passenger demand, higher-than-expected railway diversion, lower-than-expected fund-raising projects, etc.