occurrences

The company released financial results for the third quarter of 2023. The first three quarters of this year achieved revenue of 15.41 billion yuan, up 27.5% year on year, and net profit to mother of 2.58 billion yuan, up +13.4% year on year. Among them, Q1, Q2, and Q3 achieved revenue of 44.2/52.9/5.70 billion yuan, and net profit to mother for the single quarter, respectively. The report revealed that the diluted EPS for the first three quarters of this year was 0.46 yuan/share, and the weighted ROE was 7.44%.

reviews

The company is mainly engaged in investment and operation of transportation infrastructure, as well as equity investment in related industries, finance, environmental protection, etc. in the highway industry chain and value chain. Currently, the company's profits mainly come from two major business segments: toll road and bridge operation and investment and operation.

Road and bridge operations: In the first three quarters of 2023, the company achieved toll revenue of 8.18 billion yuan, an increase of 9.11% over the previous year. Among them, the revenue of the Jiqing Expressway was 2.8 billion yuan in the first three quarters, accounting for 34.6% of the revenue. The rest was more than 10 highways, including sections related to the Beijing-Taiwan Expressway.

In terms of investment and operation: The company achieved investment income of 971 million yuan in the first three quarters, an increase of 8.76% over the previous year. Among them, long-term equity investment income calculated by the equity method is 681 yuan, investment income from transactional financial assets during the holding period is 67 million yuan, and interest income from bond investments during the holding period is 222 million yuan.

Investment ratings

Currently, the company has two roads to be renovated and expanded. The Qiji section of the Beijing-Taiwan Expressway project was widened to 12 lanes in both directions, and the Jihe Expressway was changed from 4 to 8 in both directions. These key projects are expected to be completed in 24 to 25 years, and are expected to contribute incremental space in the next few years. We are optimistic about the future growth of traffic on the company's highways. The first coverage was given, and a “gain” rating was given.

Risk warning

The pace of construction under construction fell short of expectations, and the decline in traffic exceeded expectations.