Sichuan Development acquired 16% equity and became the actual controller of the company, and the company gorgeously turned to the provincial state-owned enterprises: in April 2018, the company announced that the major shareholders would transfer 16% of their shares to Sichuan Development (Holdings) Co., Ltd. (hereinafter referred to as Sichuan Development). The actual controller of the company changed from Huang Zhiming to Sichuan SASAC. Sichuan Development is a wholly state-owned limited liability company funded by the Sichuan Provincial people's Government, with total assets of 906.1 billion yuan in 2017. It owns Sichuan Railway Investment (wholly-owned), Sichuan Exchange (wholly-owned), Sichuan Neng Investment (holding) and Sichuan Industrial Revitalization and Development Investment Fund Co., Ltd. (single major shareholder). It is also the controlling party of Sichuan Financial Control, Sichuan Airlines, Sichuan Mining and other companies, is the core provincial holding platform in Sichuan. At the same time, the company's domestic credit rating is AAA (China Integrity rating), international rating A-(Fitch), with excellent asset operation ability.
Sichuan is the most active province in the domestic urban rail transit industry. The mileage under construction in Chengdu exceeds 400km, and the company is the first to benefit: the mileage under construction in Chengdu reaches 405.5 km, ranking first in the country.
Based on the southwest and in the right place at the right time, the company currently has a high market share in the urban rail market in Chengdu, including the rest of Line 3 and Line 4, as well as the vehicles of Phase 1 and Phase 2 of Line 5, which are about to be opened to traffic, with a cumulative scale of about 35-4.3 billion yuan. In the next 2-3 years, Chengdu will have more than 275 km of subway lines and more than 90 km of trams. The company has a market share advantage in the subway field and is expected to participate in all tram line projects.
To undertake the transfer of medium and low speed maglev technology in Borg, Germany, occupy the commanding heights of industry development, base on the southwest and aim at the whole country: the company actively introduces new technology at the same time in the industrial layout. At the end of 2017, Borg signed a new generation of medium and low speed maglev cooperation agreement to vigorously develop a new generation of medium and low speed maglev system, which aims to look to the future and occupy the commanding heights of industry development. With the continuous maturity of technology, the new generation of medium and low speed maglev system Its superiority has been widely recognized by the industry and the market. Compared with other urban rail systems with the same transport capacity, it has obvious advantages in advanced technology, safety, economy, comfort, adaptability, energy saving and environmental protection. It can completely replace the traditional wheel-rail system and straddle monorail system, which will be the mainstream direction of the future development of urban rail transit. In addition, on the basis of focusing on local industrialization, the company will seize opportunities, vigorously expand markets inside and outside the province, and take the southwest as a foothold to radiate the whole country.
Continue to peel off backward assets, travel light, and concentrate on the development of high-end rail transit business: the company has previously diversified business and invested more energy in various business sectors, so that the performance of concrete equipment, road construction machinery, track consulting and other sub-sectors is not satisfactory. From 2016, the company began to actively spin off its original weak business, divesting Hefei Xinzhu (road machinery), Meishan Xinzhu, concrete machinery and other plates, and sold Xintu track Engineering Consulting Company in 2018. At present, only the new construction of special vehicles has a poor performance, and further asset restructuring will not be ruled out in the future.
Profit forecast: from 2018 to 2020, the company is expected to have an income of 27.4,41.5 and 6.85 billion, with a net profit of 102 million, 203 million and 404 million, corresponding to EPS of 0.16,0.31 and 0.62 yuan, and PE of 54,27,14x, with broad long-term growth space.
Risk tips: rail transit business is not as expected, market competition is intensified, and so on.