The real estate business has entered the stage of inventory digestion, and the acquisition of Hongnao Railway focuses on the main logistics business. Guanghui Logistics is the only modern logistics platform under Guanghui Group. In 2021, the company achieved 3.317 billion yuan in operating income and 573 million yuan in net profit, of which real estate business accounted for more than 95%. In 2019, the company promised not to add other projects for the purpose of commercial housing sales, and the real estate business officially entered the stage of stock digestion. In June 2020, the company participated in the construction of Nao Railway, and in May 2022, the company bought a 92.7708% stake in Hongnao Railway from Guanghui Energy. It marks the comprehensive transformation of the company to the main business of energy logistics, and the revenue and profit structure will continue to be optimized.

Under the background of energy supply, the 14th five-year Plan is a major opportunity for the development of Xinjiang coal transportation. Xinjiang is rich in coal resources, the potential development space is huge, and mining has the advantage of natural cost. Under the background of energy supply, the status of coal resources in Xinjiang has changed greatly from the 13th five-year Plan to the 14th five-year Plan, and the core tone has changed from regional to external supply. In terms of output, Xinjiang coal production capacity increased by 160 million tons per year during the 14th five-year Plan period, with a total production capacity of more than 4.6 billion tons per year. In terms of external supply, with the improvement of logistics capacity out of Xinjiang, Xinjiang coal transportation has entered a period of rapid development in the past two years, of which railway logistics is the most efficient way for resources to go out of Xinjiang. This year, H1-Urumqi Bureau's foreign coal transport volume is expected to increase by 50% compared with the same period last year. There is a large gap between coal supply and demand in Sichuan and Chongqing for a long time, and we believe that Xinjiang coal supply will usher in a blowout during the 14th five-year Plan period.

Jiannao-Hongnao railway is the main channel of resources out of Xinjiang. It is optimistic that with the improvement of transport capacity in the future, railway transport volume and profits will achieve steady growth. In the future, Jiannao-Hongnao railway will constitute the best channel for energy transportation in Xinjiang, the transportation distance of resources out of Xinjiang in the quasi-eastern region will be reduced by 300km, and the transportation of resources in Turpan-Hami region will be transferred to railway. The overall cost of going out of Xinjiang has been greatly optimized, and we estimate that the supply cost of coal from Tuha to Sichuan and Chongqing is not much different from that of Shaanxi coal. The Nao-Hongnao Railway is located in the Tuha coal production belt, and the existing stock capacity is higher than the railway transport capacity. Hami plans to increase its production capacity by 6500 million tons per year during the 14th five-year Plan period, and the output is expected to double. The electrification transformation of Hongnao Railway will be put into production in 2024, and the medium-term transport capacity is expected to be increased to 6000-80 million tons. Under the background of prosperous supply and demand, we neutral forecast that Hongnao Railway will achieve a transport volume of 37.46 million tons, an income of 3.418 billion yuan and a net profit of 945 million yuan by 2025.

Investment suggestion: the company's acquisition of high-quality railway assets is formally transformed into the main logistics industry, and the future income and profit growth is more certain. It is estimated that the EPS of the company from 2022 to 2024 will be 0.65, 0.72, 0.77 respectively, corresponding to 9.76X/8.81X/8.28X, corresponding to PE, which will be rated as "overweight".

Risk hint: the demand for outward transportation of resources in Xinjiang is not as expected, and the landing of electrification transformation has been delayed.