Event: Guanghui Logistics issued an announcement announcing the acquisition of 92.77% of the Hongnao three Railway Company held by Guanghui Energy with 4.176 billion cash, prompting the two sides to focus more on the main business, optimize their asset structure, and solve the problem of inter-industry competition among related companies.
Firmly implement the business strategy of focusing on the main logistics business, and the income structure will be gradually improved in the future. In 2021, real estate projects accounted for a relatively large proportion of the logistics income structure of Guanghui. The total income of the whole year was 3.317 billion yuan, of which the real estate income reached 3.152 billion yuan. After the backdoor listing in 2017, the company periodically implanted some high-quality real estate projects, bringing stable cash flow to the company. Guanghui Logistics has promised in 2019 that it will not add other residential real estate development projects based on commercial housing sales in addition to the development of major projects such as logistics and commercial services, with the primary goal of focusing on the main logistics industry. Participation in the construction of Jiannao Railway and the acquisition of Hongnao Railway have helped the company take a solid step in the transformation to energy logistics.
To master the core assets of northwest railway logistics and transportation, there is still much room for improvement in the future production capacity. Hongnao San Railway Company has an income of 1.004 billion yuan and a net profit of 45.3691 million yuan in 2021. After the completion of this acquisition, Guanghui Logistics will grasp the key core assets in the "one main and two wings" strategic north passage of the country's railway in and out of Xinjiang, that is, to participate in the construction and operation of the upstream Jiannao railway, and to acquire and hold the downstream Hongnao railway. a total of about 866 kilometers of railways, opening up transport channels in northern Xinjiang and solving the transport problems of coal and other commodities. The current designed transport capacity of the Hongnao railway is 39.5 million tons per year. After the completion of the ongoing electrification transformation, the annual transport capacity of the Hongnao railway can reach 6000-80 million tons; and then through double-track construction and other measures to increase production and capacity, the final formation of 150 million tons of annual freight capacity.
Benefiting from the potential demand of Xinjiang coal transportation, the profit growth of energy logistics is expected in the future. Xinjiang is an important national energy reserve base, and the proved coal reserves rank third in the country. Due to transportation problems, coal is mainly supplied in Xinjiang at present, but with the improvement of logistics links, it has begun to expand to Yunnan-Guizhou-Sichuan region. According to official data, the average annual gap between supply and demand of coal in Sichuan and Chongqing is nearly 100 million tons, and the potential of Xinjiang coal transportation is huge. The company promises that the deduction non-net profit of Hongnao Railway from 2022 to 2024 is not less than 159 million yuan, 351 million yuan and 496 million yuan respectively. The proportion of railway logistics and transportation revenue is expected to exceed 50% in 2024.
Investment suggestion: the company is officially transformed to the main logistics business. It is estimated that the company's EPS from 2022 to 2024 will be 0.57, 0.65, 0.72 yuan, respectively, and the corresponding PE will be 8.1X/7.1X/6.4X, maintaining a "buy" rating.
Risk hint: the progress of the construction of the Nao railway is not as expected, and the growth rate of coal freight volume out of Xinjiang is not as fast as expected.