The company issued a semi-annual performance forecast for 2020, with a profit of 352 million yuan to 388 million yuan in the first half, an increase of 680.76% to 762.25% over the same period last year.
The construction of ETC contributed to the performance growth in the first half of the year. The reasons for the rapid growth of the company's performance in the first half of 2020 are:
1) the operating income of expressway ETC equipment increased compared with the same period last year, resulting in an increase in net profit belonging to shareholders of listed companies; 2) the government subsidies received by the company increased significantly compared with the same period last year, thickening profits.
ETC parking is expected to become the next growth point in the industry. Last year, more than 360000 car owners used ETC "non-inductive parking" in Wanda Plaza, with a cumulative transaction value of more than 6 million yuan, according to the "ETC owners' Annual Travel Guide" released by ETC, a full-service platform for car owners owned by Headlamp Technology.
On July 6, 2020, Shandong Expressway Group and Shandong Airport Group landed the first case of "ETC& non-inductive payment".
The future development of the company is driven by the demand of vehicle and road coordination in 5G era. The company signed the Strategic Cooperation Framework Agreement with Tencent Technology (Shenzhen) Co., Ltd. in August 2019. Taking advantage of their respective advantages, the two sides will conduct in-depth cooperation in V2X, multi-sensor fusion, vehicle-road coordination and self-driving, and in-vehicle terminal services based on intelligent networking system cloud in the future. Facing the 5G era, the company stores a number of product technologies in the fields of road test, intelligent vehicle terminal and management platform, which will become an important new growth point in the future.
Investment advice: the rapid growth of the company's performance in the first half of the year has laid a solid foundation for the whole year, and the construction of ETC parking lot is expected to drive the company's continued growth. It is estimated that the EPS from 2020 to 2021 will be 4.92 yuan and 5.65 yuan respectively, giving a buy-A rating.
Risk hint: the promotion of ETC policy is weaker than expected; the competition in the industry intensifies.