Incidents:
In the first quarter of 2024, the company achieved operating income of 6.60 billion yuan, an increase of 7.39% over the previous year; realized net profit of 547 million yuan, an increase of 34.99% over the previous year; and realized net profit of 541 million yuan without return to mother, an increase of 35.05% over the previous year.
The company's passenger/freight volume increased by 49.4%/7.5% year-on-year in 24Q1
Benefiting from the continued release of passenger travel demand, from January to January 2024, the company's cumulative passenger traffic volume was 18.0363 million people, an increase of 49.38% over 2023. Among them, intercity trains/direct trains/other vehicles sent 652.24/32.62/11.1878 million passengers respectively, an increase of 45.30%/130.79%/50.30% over the previous year, and the passenger flow growth rate of drive-thru buses was the best. In January-March, the company's freight volume was 18.3873 million tons, up 7.49% year on year, of which the completed cargo handling volume was 15.1764 million tons, up 14.97% year on year, and completed cargo delivery volume was 3.229 million tons, down 17.79% year on year.
24Q1 operating costs increased 4.8% year over year
In the first quarter of 2024, the company's operating costs were 5.795 billion yuan, an increase of 4.77% over the previous year. Management/financial expenses were $38 million and $05 billion, respectively, with year-on-year changes of +1.85% and -67.90%. Among them, the company's Q1 interest expenses were 0.27 million yuan, a year-on-year decrease of 4.98%.
Gross margin increased by 2.2 pct year on year, and profitability increased significantly
The increase in revenue in the first quarter of 2024 was greater than the increase in operating costs, driving a continuous increase in profitability.
The company's gross margin for the first quarter was 12.20%, up 2.2 pct from Q1 in 2023; the company's net margin to mother was 8.29%, up 1.70 pcts from Q1 in 2023.
Profit Forecasts, Valuations, and Ratings
The company's revenue for 2024-2026 is expected to be 282.23/298.16/31,500 billion yuan, respectively, with year-on-year growth rates of 7.74%/5.65%/5.65%; net profit to mother is 14.23/15.61/1,658 billion yuan, respectively, with year-on-year growth rates of 34.47%/9.68%/6.21%; EPS 0.20/0.22/0.23 yuan respectively.
Following the transformation of Guangzhou Railway Station and Guangzhou East Railway Station into high-speed rail stations, the company is expected to fully enter the high-speed rail operation field. Referring to comparable company valuations, the company will be given 20 times PE in 2024, corresponding to a target price of 4.0 yuan, and maintain the “gain” rating.
Risk warning: Railway passenger demand falls short of expectations; newly opened line capacity falls short of expectations; road network diversion.