Investment logic
Jiangxi Province passenger transport leader, network layout to establish advantages: the company is the largest and most influential road transport enterprise in Jiangxi Province. Its core enterprise Jiangxi Changyun Group Co., Ltd. is the first group company in the province's road transportation industry to implement authorized management of state-owned assets. The company has station yard and shift line resources in 8 prefecture-level cities in 11 prefecture-level cities in Jiangxi Province, and has bus stops and operating lines in 2 prefecture-level cities, which has absolute network advantages in Jiangxi Province.
Competing with high-speed rail, radiating districts and counties, sinking rural areas: 1) high-speed railway has a great impact on traditional passenger transport, and a large number of passengers are attracted to travel on the railway, resulting in the diversion of highway passenger transport along the line; 2) in the face of competition, the company forms a seamless competition-cooperation relationship with high-speed rail, actively arranges Shinkansen, sinks rural areas and radiates the county-level subdivision network, and turns unfavorable competition factors into beneficial growth points. 3) the location advantage of the company's passenger station: the old passenger station has been relocated in the prime location of Nanchang City, with outstanding commercial value, and has locked in commercial leasing profits in advance.
The acquisition of Jiajie Logistics covers the national network: 1) the company acquires 57% equity in Jiajie Logistics Company with 114 million yuan, and Jiajie promises that the net return profit for 2015-2017 will not be less than 33.5 million yuan, 41.875 million yuan and 52.34375 million yuan; 2) the company will rely on Jiajie's advanced information platform, combine its own passenger transport resources, enhance O2O capacity, promote platform integration, expand growth space, and enhance profitability.
Multi-layout benefits from tourism growth, and the corresponding national reform activates the company to develop by leaps and bounds: Jiangxi Province is rich in tourism resources, but the development is relatively late, and it is expected to have great growth potential in the future. The company develops tourism business, builds a "big tourism industry", integrates passenger tourism, and invests in Jing'an martial arts world main park, Nancheng "one mountain, one water" tourism development project, Zixi Dajue Mountain Hot Spring Resort and other projects. it has expanded the new growth point of performance. Under the Jiangxi national reform policy, the company is expected to further exert the synergy of high-quality assets through mergers and acquisitions, and promote enthusiasm through employee equity incentives, and its performance is expected to grow in the future.
Investment suggestion
We believe that the company has the resource advantage of the leading passenger transport in Jiangxi Province, adopts the active strategy of competing with high-speed rail and sinking the countryside, expands the growth space of logistics through the acquisition of high-quality assets, and benefits from the rapid development of tourism business in Jiangxi Province. it has good profitability and growth, so it is recommended.
Valuation
We estimate that the company's EPS for 2015-2017 will be 0.47, 0.69, and 0.87 yuan, giving the company a target price of 15.6 yuan, with a "buy" rating corresponding to the PE forecast of 33.2x/22.6x/17.9x.
Risk
High-speed rail impact risk; investment control risk related to mergers and acquisitions.
