Low valuation and high dividend local infrastructure state-owned enterprises, dangerous capital brand shows investment value, given buy rating Zhejiang Jiaotong Co., Ltd., as a leading enterprise in infrastructure construction in Zhejiang Province, stripped off chemical business in 22 years to focus on infrastructure main business, backed by major shareholder Zhejiang Stock Exchange. In the long run, the project is rich in resources, sufficient orders on hand, and benefit from the catalysis of the special valuation market in the short term. The compound growth rate of the company's cash dividend in 18-22 years was 18%. The proportion of cash dividends in 22 years reached 20%. The high dividend improved the rate of return on investment. In June 23, the company was awarded the Great Wall Life Insurance to become the second largest shareholder of the company, demonstrating the investment value of the company. We estimate that the 23-25 year net profit of the company will be 16.21 million, 19.26 billion, 2.325 billion, and the approval will give the company 9 times PE in 23 years, corresponding to the target price of 5.57 yuan, with a "buy" rating for the first time.
Point 1: three years after sufficient orders are on hand and major shareholders make efforts during the 14th five-year Plan
The growth rate of the 14th five-year Plan for transport investment in Zhejiang Province is + 42.86%, and the planned mileage of railway / high-speed rail during the 14th five-year Plan period is 152% more than the completed value of the 13th five-year Plan. 306%. In 23, the planned investment in infrastructure construction in Zhejiang Province was 350 billion yuan, an increase of 3 percent over the same period last year. Zhejiang Stock Exchange, a major shareholder, is the main force of infrastructure investment in the province. As of 2023M3, the proportion of expressways invested in the province was 64%. The railways built in 2021 accounted for 74% of the railway mileage in the province. In the plan of Zhejiang Stock Exchange's "14th five-year Plan", it is pointed out that more than 500 billion of the transportation investment should be completed by the end of 2025, less than 20% in the first two years, and 82.9 billion yuan in 23 years, accounting for 16.58%. Therefore, we estimate that the average growth rate of transportation investment in the last two years of the 14th five-year Plan will be more than 31% to achieve the target. At present, more than 30% of Zhejiang Jiaotong's income is the income of major shareholders and related parties, and there are few enterprises within the group that compete with Zhejiang Jiaotong. We think that "the 14th five-year Plan"
In the next three years, the company's orders may be expected to grow rapidly, and the performance release will enter the upward cycle.
Point 2: lay out multiple industrial bases and accelerate the integrated development of upstream and downstream industrial chains of capital construction.
In the upper reaches of infrastructure, the company expands the main business of building materials market empowerment, acquires shares in five building materials companies under the Traffic Resources Group, and sets up a construction industrialization base with Shaoxing City Investment platform. upstream businesses such as prefabrication of prefabricated bridge components, solidification and disposal of high-performance asphalt concrete and mud, and recycling of waste building resources. Downstream of the capital construction, actively layout maintenance bases, 6 new maintenance bases and 22 landing maintenance bases in 2022, including 12 market-oriented maintenance bases and 10 indemnificatory maintenance bases. Zhejiang Jiaoko has undertaken about 80% of the market share of the operating expressway in Zhejiang Province, the newly signed contract value of the 22-year maintenance plate is more than 5 billion yuan, and the influence of the maintenance brand is constantly increasing. We are optimistic about the layout of the upstream and downstream industrial chain and the development of business diversification, waiting for the release of the company's performance.
Point 3: actively carry out the transformation of mathematical intelligence, and improve the quality and efficiency of the three major application scenarios.
The company focuses on the transformation of digital intelligence, forming three major digital technology application scenarios: smart construction site, smart maintenance and smart factory, with 37 independent R & D systems and 15 software copyrights. With the development of the self-developed version of the intelligent factory system, the first fully automated mother liquor synthesis production line on Lanxi base, the labor consumption has been reduced by more than 60%; the discharge efficiency of the intelligent central control system of Hubei Shiyan base commercial concrete mixing plant is 40% higher than that of traditional manual labor. The labor cost is reduced by more than 50%, and the carbon-water neutralization system cost is reduced by about 35%. We are optimistic about the quality improvement and efficiency brought by the transformation of mathematical intelligence to the company.
Risk tips: downstream demand is not as expected; order execution is not as expected; numerical intelligence transformation is not as expected; cost control is not as expected; potential security problems.