\u3000\u30 Shenzhen Guohua Network Security Technology Co.Ltd(000004) 29 Guangdong Provincial Expressway Development Co.Ltd(000429) )
Report guide
Guangdong Provincial Expressway Development Co.Ltd(000429) released the 2021 annual report. The annual net profit attributable to the parent company was 1.7 billion yuan, with a year-on-year increase of 95.9% and 15.7% compared with 2019. We estimate that from 2022 to 2023, the dividend yield of the company corresponding to 2022 / 3 / 15 share price is 7.8% and 8.3% respectively. It is suggested to pay attention to the stable allocation value of the company’s high dividend.
Key investment points
The net profit attributable to the parent company in 2021 increased by 15.7% compared with 2019, and the performance was stable
The company’s net profit attributable to the parent company in 2021 was 1.7 billion yuan, of which the net profit attributable to the parent company in the fourth quarter was 306 million yuan, with an apparent year-on-year decrease of 28.2%. However, in the same period last year, the company’s cash purchase of 21% equity of Guanghui company confirmed that the profit and loss attributable to the parent company was about 163 million yuan. After excluding the impact of this item, the company deducted 313 million yuan of net profit attributable to the parent company in 21q4, with a year-on-year decrease of 14.4%, Some are affected by the disturbance of local epidemic in the Pearl River Delta.
Overall, the performance of the whole year has been steadily repaired. The company’s net profit attributable to the parent company in 2021 increased by 95.9% year-on-year and 15.7% year-on-year compared with 2019. Our analysis mainly benefited from: 1) the first ring road in Foshan began to charge fees from the beginning of 2020 and strictly investigated overloading, which continued to bring back trucks to Fokai and Guangfo Expressway; 2) The volume and price of Fokai expressway have increased both. On the one hand, the charging standard has changed from 0.45 yuan / km to 0.6 yuan / km after the reconstruction and expansion. On the other hand, the opening of the whole line connected with the reconstruction and expansion of Kaiyang expressway has brought drainage; 3) Guanghui Expressway and Dongguan Huihe expressway will be opened at the end of 2020.
After the reconstruction and expansion of Fokai south section, the charging period is extended, and the meter consolidation of Guanghui expressway is superimposed to improve the stability of operation
The company’s holding Guangfo Expressway has stopped charging since 0:00 on March 3, 2022. However, on the one hand, the reconstruction and expansion of the south section of Fokai was approved by the government in June 2021, and the period of heavy nuclear charging is 24.60 years (201911.8-2044.6.14). On the other hand, it further acquired 21% equity of Guanghui company at the end of 2020 to realize holding and consolidation. From the perspective of medium and long term, it is expected to significantly narrow the operation term risk and profit risk of road property.
It promises to pay 70% of dividends in 21-23 years, which has the value of stable dividend allocation
The company previously issued the “return to shareholders plan for the next three years (20212023)”. In order to pay attention to the reasonable return of investors and take into account the long-term development of the company, it is planned that the company should distribute dividends in cash every year, and the annual cash dividend from 2021 to 2023 shall not be less than 70% of the consolidated net profit of the current year. According to the 2021 annual report, the pre tax dividend of the company is 0.57 yuan per share, with a corresponding dividend proportion of about 70%, and the commitment is fulfilled. Looking forward to 20222023, corresponding to our profit forecast, assuming that the dividend ratio remains 70%, the dividend ratio is estimated to be 7.8% and 8.3% respectively corresponding to the share price of 2022 / 3 / 15, which has considerable steady dividend allocation value.
Profit forecast and valuation
We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 1.645 billion yuan, 1.759 billion yuan and 1.867 billion yuan respectively, corresponding to 9.0 times, 8.4 times and 8.0 times of PE respectively. In addition, the company has the characteristics of high dividend, so it can pay attention to the steady absolute income allocation value and maintain the “overweight” rating.
Risk warning: the growth of traffic volume on consolidated roads is less than expected; The diversion effect of parallel sections exceeds the expectation; The impact of the adjustment of charging policy exceeded expectations.
