Incidents:
In 2023, the company achieved operating income of 26.546 billion yuan, an increase of 18.62% over the previous year, achieved net profit of 3.297 billion yuan, an increase of 8.47% over the previous year, and realized net profit without deduction of 2,931 billion yuan, an increase of 18.17% over the previous year. Among them, in the fourth quarter of 2023, the company achieved operating income of 8.606 billion yuan and net profit of 630 million yuan to mother. In 2023, the company paid a cash dividend of 0.42 yuan per share, with a dividend rate of 61.66%.
In 2023, the company achieved toll revenue of 10.557 billion yuan, a year-on-year increase of 10.6%, benefiting from the recovery in traffic. In 2023, the company achieved 10.557 billion yuan in tolls, an increase of 10.57% over the previous year.
Among them, the main road production, the Jiqing Expressway achieved revenue of 3.63 billion yuan, an increase of 7.40% over the previous year; the Beijing-Taiwan Expressway benefited from the completion and opening of the Jitai section in 2022, achieving revenue of 2.165 billion yuan, an increase of 43.05% over the previous year.
Due to the impact of half-closed construction on the Jihe Expressway, revenue in 2023 fell 47.04% year on year. Currently, the company's projects under construction are mainly the renovation and expansion of the Qiji section of the Beijing-Taiwan Expressway and the renovation and expansion of the Jihe Expressway. Investments of 2,312 billion yuan and 5.260 billion yuan were completed in 2023, and are expected to be completed and opened to traffic by the end of 2026 and 2024, respectively.
The new acquisition of Shandong Expressway Information Group contributed about 200 million yuan in net profit. In 2023, the company completed the acquisition of 65% of Information Group's shares. In 2023, Information Group achieved revenue of 4.360 billion yuan, an increase of 8.72% over the previous year, achieved net profit of 313 million yuan, and contributed about 200 million yuan to the company's profit.
In 2023, the Rail Transit Group completed railway traffic volume of 105 million tons, an increase of 17.6% over the previous year, achieved operating income of 4.550 billion yuan, an increase of 2.82% over the previous year, and achieved net profit of 447 million yuan. In 2023, Qilu Express achieved revenue of 5.609 billion yuan and net profit of 534 million yuan.
In 2023, the company's dividend was 0.42 yuan per share, with a dividend rate of 61.7%. According to the company's “Shareholder Return Plan for the Next Five Years (2020-2024)”, the profit distributed in cash every year in 2020-2024 is not less than 60% of the net profit of the consolidated statement realized in the current year. In 2023, the company paid a cash dividend of 4.2 yuan for every 10 shares, an increase of 0.2 yuan over 22, and a dividend rate of about 61.66%. It is conservatively assumed that the company's dividend rate in 2024 is 60%. Based on the closing price of 9.02 yuan on April 18, the company's dividend rate in 2024 is estimated to be about 5.0%, and it still has a significant dividend rate advantage.
Profit Forecasts, Valuations, and Ratings
Considering the company's acquisition of Shandong Expressway Information Group in 2023, the company's revenue for 2024-2026 is expected to be 284.24/301.52/31.996 billion yuan, with year-on-year growth rates of 7.08%/6.08%/6.12% respectively; net profit to mother is 36.19/40.06/4.379 billion yuan, respectively, with year-on-year growth rates of 9.77%/10.68%/9.31%, respectively; EPS is 0.75/0.83/0.90 yuan respectively. The company's core road and bridge assets are all the main lines of the highway network in Shandong Province. The road network is perfect. Referring to comparable company valuations, the company was given 14X PE in 2024, corresponding to a target price of 10.5 yuan, maintaining a “buy” rating.
Risk warning: Traffic growth falls short of expectations; changes in charging policies.