Main points of investment:
News / bulletin. In the first three quarters, the company achieved revenue of 1.819 billion, an increase of 91.95% over the same period last year, and a net profit of 483 million, an increase of 49.45% over the same period last year, deducting 428 million of non-net profit, an increase of 32.29% over the same period last year. The weighted average ROE was 8.80%, an increase of 1.64% over the same period last year, and the performance was in line with expectations.
Maintain steady growth at a high speed, and Miki's intelligent income is gradually reflected. The effect of overload treatment continued in 2017. on the one hand, it increased the number of road vehicles, on the other hand, it reduced the loss of roads and the cost of road maintenance, and the overall performance of the highway plate was excellent. We judge that the company's Q3 high-speed business growth rate is about 10%, and the profit in the first three quarters is about 350 million. Miki Intelligence consolidated in February 2017, with a net profit of 32.07 million in the first half of the year. Taking into account the traditional peak season of Q3, we judge that the net profit of Q3 is more than 40 million, and there is the possibility of further exceeding expectations in Q4, and the profitability of Miki Intelligence combined with the balance sheet and gradually reflected.
There is no high-speed capital expenditure for the time being, and we are still optimistic about the expectation of continuous integration in the future. At present, it is believed that Chutian Expressway has high investment value: first, there is no new capital expenditure in the high-speed plate, which brings about 900 million stable operating cash flow to the company every year; second, after the acquisition of Miki Intelligence, relying on its R & D advantages and industrial experience, superimposed Chutian high-speed capital advantages and Hubei Province Exchange Company's provincial resources, it is expected that in the future, it is expected to further expand the intelligent industrial chain and gradually realize business transformation.
The increase of shareholders' holdings shows the confidence of the company's stock price. Zhang Zong, the former Miki controller, increased his shareholding by 13.7356 million shares in September, and the total shareholding increased by 0.79 percent to 10.77 percent. We believe that, as a long-term cooperation with the company, this increase shows its recognition of the company's management and development strategy, as well as its firm confidence in the company's sustained and good development in the future.
Raise earnings forecasts and maintain buy ratings. Due to the overall strength of the high-speed business this year, and the company's non-recurrent profit and loss of about 55 million from fund projects, we raise our profit forecast. We estimate that the net profit for 2017-2019 is 625 million, 640 million and 693 million respectively (originally predicted to be 545 million yuan, 581 million yuan and 612 million yuan), EPS is 0.36,0.37 yuan and 0.40 yuan respectively, and the PE ratio is 15 times, 15 times and 14 times respectively. Valuation does not reflect the value of Miki, significantly undervalued, maintain the buy rating.
Risk hint: highway traffic declines.