Events:
The company disclosed its three quarterly reports for 2017. 2017Q3, the company realized operating income of 389 million yuan (+ 18.52%), net profit of 253 million yuan (+ 13.93%), EPS of 0.2437 yuan (+ 13.93%), weighted ROE of 4.85% (+ 0.2pct).
Comments:
1. Steady growth of the main business, in line with market expectations
2017Q3, the company realized operating income of 389 million yuan (+ 18.52%), operating cost of 142 million yuan (+ 38.58%), gross profit of 255 million yuan (+ 10.14%), gross profit of 65.52% (- 4.99pct). The administrative expenses are 11 million yuan (+ 23.21%), the financial expenses are-5 million yuan, and the investment income is 68 million yuan (- 4.41%), of which 68 million yuan (+ 13.77%) is invested in joint ventures and joint ventures. The net profit of homing is 253 million yuan (+ 13.93%). The main year-on-year growth drives the company's performance and contributes to the investment income of joint ventures and joint ventures.
2. Two-wheel drive performance of road production and finance
The company's road products include Dongguan-Shenzhen Expressway Phase I, Phase II, Phase III Dongcheng Section and Longlin Expressway, and is entrusted with managing the Shijie Section of Phase III of Dongguan-Shenzhen Expressway, with a total mileage of about 61.26 km. Li-Shen Expressway, located in the hinterland of the Pearl River Delta, is an important part of the Pearl River Delta Ring Road in Guangdong Province, and has become an important fast channel connecting Guangzhou, Dongguan and Shenzhen.
The company also shares 11.11% of Humen Bridge (including investment income).
Since 2016, driven by the continuous growth of the number of private cars in the Pearl River Delta region, the integration of Shenzhen and Shenzhen, and the renovation of toll-evading cars on the provincial network, the mixed vehicle flow of the whole line of Shenzhen-Shenzhen high-speed has grown at a high speed. In addition, the company began to implement national standard charges (reclassification and adjustment of models, full weight charges for trucks) to further boost road production revenue.
The company's financial business is mainly financial leasing and commercial factoring, which complement each other to provide comprehensive and diversified financial service products for target customers and enhance the overall competitiveness of the company's financial business. Rongtong Leasing, a wholly owned subsidiary of the company, is engaged in financial leasing business, mainly in the form of direct leasing, sale and leaseback, etc., focusing on infrastructure, public transport, medical education and manufacturing enterprises. Hongtong factoring, a subsidiary of the company, is engaged in commercial factoring, focusing on engineering construction, medical education, warehousing supply chain and other areas.
3. Steady improvement of investment income
17Q3, the company achieved an investment income of 68 million yuan (- 4.41%), of which 68 million yuan (+ 13.77%) was invested in joint ventures and joint ventures. The main shareholding companies are Humen Bridge (11.11%) and Dongguan Securities (20%). Among them, Humen Bridge 2017Q3 toll income of 445 million yuan (+ 8.8%), maintaining a steady growth.
4. Profit forecast and valuation
We forecast that the company's annual EPS in 17-18-19 will be 0.88,0.99,1.08 yuan respectively, corresponding to the previous PE 13.9, 12.5 and 11.4X, maintaining the "highly recommended-A" investment rating.
5. Risk hint: the macroeconomic decline exceeded expectations.