Local state-owned enterprises in high-dividend infrastructure construction, which for the first time covered the entire infrastructure construction industry chain to focus on the entire infrastructure construction industry chain and actively transform urban construction and operation resource integrators. We believe that the company currently has three main recommended logic points: 1) The value of transportation data elements is worth paying attention to. The company operates more than 95% of Shanghai's municipal roads, and has established a digital group to improve the digital and information technology system; 2) The traditional construction business has maintained steady growth. New orders have increased 14% year-on-year in '23, and the advantages of shield machine development are obvious; 3) Those with high dividends and high dividends have maintained their dividend ratio in the past ten years At 30 Around%. As of March 20, '22, the closing dividend rate for '22 was 4.41%. We expect the company's net profit to be 28.2, 31.2, and 3.49 billion yuan in 23-25. The approval will give the company 8 times PE in 24 years, and the corresponding target price is 7.92 yuan, which covers the “buy” rating for the first time.
Accumulating deep high-quality traffic data assets, favorable data factor policies have promoted the increased emphasis on value revaluation data elements as new quality productivity. From a transaction perspective, the scale of data transactions in China in 2022 is 87.68 billion yuan. The market CAGR is predicted to be 34.9% in 21-25, and the CAGR is still expected to exceed 20% in 25-30. At the same time, from January 1, 2024, data resources are treated as an asset to be included in financial statements. A large number of high-quality traffic data assets within the company are worth paying attention to. The company's subsidiary City Operation Group operates more than 95% of Shanghai's municipal roads, undertakes the task of operating and maintaining more than 2,300 kilometers of transportation facilities across the country, incubated the “Shanghai Parking” app, continued to accumulate digital assets, and achieved a “low-speed work vehicle time and space” product transaction contract in August 23, activating the new field of “traffic big data” in Shanghai data product trading for the first time, and achieving an important breakthrough in data resources from the business side to the product side. The Digital Group explores the integrated development model of digital business and operation business, provides digital solutions for the entire life cycle of infrastructure, software and hardware products and professional services for system integration, and signs multiple municipal highway projects to implement intelligent transformation, and strengthen the entire digital service chain.
Traditional main business orders are sufficient, and shield machine research and development capabilities are strong
In 2023, the company won orders of about 95.38 billion yuan, an increase of 14.11% over the previous year, and the main construction industry signed new orders of 81,976 billion yuan, an increase of 14.34% over the previous year. Among them, the winning bid orders in Shanghai increased by 31.34% year on year, accounting for 46.29% of the total number of winning orders. The subsidiary Jianyuan Asset Management's 2024 plan has signed a contract amount of 5 billion yuan, and there are 10-12 Xintuo City micro renewal projects. The company's deep cultivation of the Shanghai market is expected to benefit deeply from the progress of Shanghai's “three major projects”. Shield machine research and development advantages stand out in underground engineering. It pioneered the development of the world's first digital shield to achieve autonomous driving on soft ground. The automation rate reached 92.9%, and the propulsion speed of the autonomous driving system increased by 15%, improving the stability and efficiency of tunnel construction.
High dividends have increased investment attractiveness. The company's cash dividend to revitalize existing assets has remained around 30% in the past ten years. The cash dividend amount CAGR was 9.24%. In November 2023, the company issued an announcement to implement the 2023 semi-annual dividend, with a total dividend of 310 million yuan, accounting for 40.6% of 2023H1's net profit. In terms of dividend rates, Tunnel shares ranked 8th out of 157 stocks in the SW construction sector. In July 2023, the company announced that it plans to select the Qianjiang Tunnel as the target asset for the public REITs project. According to the 2022 annual report, the company's four franchise projects achieved revenue of 1,247 billion yuan, and the value of existing assets is worth paying attention to.
Risk warning: Infrastructure investment falls short of expectations, digital business falls short of expectations, project construction falls short of expectations, and estimates are somewhat subjective.