\u3000\u30 Shenzhen Guohua Network Security Technology Co.Ltd(000004) 98 Shandong Hi-Speed Road&Bridge Co.Ltd(000498) )
The attitude of steady growth is positive, and there is sufficient space for the development of Shandong infrastructure in the 14th five year plan. In 2022, the government will invest more in the three-dimensional network, and it is expected to increase the financial expenditure in the near future. According to the relevant transportation planning of Shandong Province, during the 14th Five Year Plan period, Shandong is expected to add 555 / 505 / 140 kilometers of Railways / expressways / rail transit every year, all of which are in the forefront of the country, with sufficient space for infrastructure development. In addition, the financial expenditure on transportation in Shandong Province accounts for 3.3% of the general public budget expenditure, which is lower than the national average of about 5%, reflecting that there is better room for the financial side. Therefore, we believe that the infrastructure investment in Shandong will maintain a stable growth during the 14th five year plan period.
Shandong Province is a leader in infrastructure construction, with excellent endowment and abundant orders in hand to support growth. As the main road and bridge construction platform of Shandong Expressway Group, the company has undertaken most road and bridge projects in Shandong Province. We estimate that about 50% of the construction orders of major shareholders can be won by the company. In 2020, Shandong Hi-Speed Company Limited(600350) group and Qilu transportation completed the merger, and the market share of the major shareholder in the province further increased to 84.2%. According to the 14th five year plan for expressway investment disclosed on Shandong Hi-Speed Company Limited(600350) official website, the company is expected to obtain Expressway related orders of more than 50 billion yuan from the major shareholder every year, which will escort the growth. In addition, by the end of 2021, the company had outstanding orders of 96.87 billion yuan, equivalent to 2.8 times the volume of revenue in 2020. There were abundant orders on hand, further improving the certainty.
Expand both areas and regions to further enhance competitiveness. In recent years, the company has gradually expanded its businesses such as highway maintenance, municipal engineering, environmental protection and water conservancy, and comprehensive area construction. At the same time, it has expanded the market outside the province through regional headquarters. The bid winning amount of projects outside the province increased from 7.295 billion yuan to 19.04 billion yuan in 20182020, and the maintenance revenue of the company was 2.43 billion yuan in 2020, a year-on-year increase of + 117%, It reflects that the company has gradually transformed from a single provincial road and bridge construction enterprise to a national comprehensive construction service provider, and its comprehensive competitiveness has been further improved.
Profit forecast. It is estimated that from 2022 to 2023, the company's revenue will be 72.63/91.07 billion yuan, and the net profit attributable to the parent company will be 2.637/3.372 billion yuan, eps1.5 billion yuan 69 / 2.16 yuan, corresponding to the closing price of 8.55 yuan on March 10, 5.05/3.95xpe, and the valuation is lower than that of peers. Give the company a "buy" rating based on the PE valuation target price of 10.99 yuan for the first time.
Risk warning. The demand is lower than expected, the market expansion is slower than expected, and there are systemic risks.
