occurrences

Recently, Shanxi Expressway disclosed the 2024 semi-annual report. During the reporting period, total operating income was 0.76 billion yuan, down -3.86% year on year; net profit to mother was 0.237 billion, down -3.82% from last year; net profit to mother after deduction was 0.236 billion yuan, down -4.19% year on year. During the reporting period, basic earnings per share were 0.16 yuan, and the weighted average return on net assets was 4.69%.

reviews

The company's main business is highway management and operation. The total toll mileage of the company's highway assets is 163.935 kilometers. It is mainly a wholly-owned subsidiary: (1) Yue Expressway, with a toll mileage of 79.188 kilometers. (2) Pingyu Expressway. The toll mileage for the Pingyao to Yushe section is 83.066 kilometers.

(3) Taijia Yellow River Bridge. The toll mileage is 1.681 km.

In terms of other business, the company built a “green energy demonstration road” to a high standard, built 9.2 MW of distributed photovoltaics throughout the line, and invested in the construction of a “comprehensive energy supply island” with the four energy supply functions of “oil, gas, electricity, and methanol.”

The company's revenue and profit declined during the reporting period, mainly due to lower toll revenue. However, with the arrival of peak periods for electricity consumption in summer and heating in winter, it is expected that the volume of coal and other energy freight will also increase markedly. The expressway under the company's administration, as the main channel for transporting energy goods, will usher in a peak period of toll revenue.

In terms of dividends, an annual cash dividend of 0.066 billion yuan was distributed, achieving the first cash dividend since completing the major asset restructuring in '18; the company issued the “Three-Year Shareholder Return Plan (2023-2025)”, and the annual cash distribution profit was no less than 40% of the profit available for distribution in that year.

Investment ratings

The two expressways of Pingyu Expressway, Yuhe Expressway and Taijia Yellow River Bridge under the company's administration are the main transportation channels for energy goods such as coal, and the region is very rich in natural resources and cultural relics tourism resources. With the Shanxi ancient architecture tour that began on September 1, combined with future holiday factors, it is expected that the attention of the cultural tourism industry chain in Shanxi will increase, and the company is expected to benefit slightly. We covered it for the first time and gave it an “gain” rating.

Risk warning

Risk of falling traffic; risk of natural disasters;