\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 377 Jiangsu Expressway Company Limited(600377) )
Key investment points
The net profit attributable to the parent company in 2021 was basically the same as that in 2019. Considering the impact of the epidemic, the overall revenue was in line with the expected revenue. Benefiting from the steady recovery of traffic flow and the incremental contribution of the opening of new roads, the company’s operating revenue in 2021 was 13.793 billion yuan, a year-on-year increase of 71.71% and 36.86% compared with that in 2019. In the split quarter, the revenue of 21q4 was 6.133 billion yuan, a year-on-year increase of 128.88%, an increase of 137.56% compared with 19q4.
In terms of cost, some road production maintenance projects during the epidemic in 2020 were postponed to 2021, and the new road was put into operation and converted to fixed assets. In addition, the increase of oil procurement cost superimposed on the adjustment of engineering settlement cost of delivered real estate projects, the company’s operating cost in 2021 was 8.782 billion yuan, a year-on-year increase of 87.37% and 91.91% compared with 2019.
In terms of investment income, the resumption of the traffic flow of the joint venture Road and bridge company benefited from the equity participation brought about the increase of toll income. Superimposed on the increase of dividends received by other equity instruments (mainly financial company investment) and the increase of income distribution of other non current financial assets (mainly guochuang Kaiyuan phase II and other funds), the investment income of the company in 2021 was 1.202 billion yuan, a year-on-year increase of 94.28% and 35.56% compared with 2019.
In terms of income from changes in fair value, benefiting from the increase in the fair value of holding other non current financial assets and subscribing for Jiangsu Financial Leasing Co.Ltd(600901) company’s convertible bonds, the company’s income from changes in fair value in 2021 was 490 million yuan, a year-on-year increase of 136026%, an increase of 587.11% over 2019.
In terms of profit, the company realized a net profit attributable to the parent company of 4.179 billion yuan in 2921, a year-on-year increase of 69.58%, a decrease of 0.50% compared with 2019, which is basically the same, of which the net profit attributable to the parent company of 21q4 was 390 million yuan, a year-on-year decrease of 31.35%. Considering the impact of the new road into fixed assets and the Nanjing epidemic in the third and fourth quarters, the overall performance of the company is in line with expectations.
The toll road business has recovered steadily, the new road put into operation is concerned, the profit stock end is further released, and the traffic flow in the main control section has recovered steadily. The annual toll revenue of the company was 8.263 billion yuan, a year-on-year increase of 37.34%, an increase of 5.49% over 2019. Among them, Changyi Expressway and Yichang Changzhou expressway were opened to traffic on December 28, 2020 and January 2021 respectively, and Wufengshan bridge was opened to traffic at the end of June 2021. The initial traffic flow of the new road still needs to be cultivated, and the pressure of fixed cost is still large. In 2021, Changyi Expressway and Yichang Changzhou Expressway had net losses of 13.37 million yuan and 43.69 million yuan respectively, and Wufengshan bridge has exceeded the expected net profit of 44.48 million yuan. We are concerned about the natural and stable increase of traffic flow in the future, which will bring further profit release.
At the incremental end, pay attention to the production of relevant sections of Longtan bridge in the medium and long term. The Longtan bridge project under construction by the company has completed a total investment of 2.006 billion yuan, accounting for 32.08% of the total investment of the project. It is expected to be opened to traffic in 2024. In addition, the company also plans to invest 2.095 billion yuan in Longtan Bridge Company to build the North connection project of Longtan bridge (12.37 kilometers), so as to connect the Longtan bridge under construction to the provincial road network. The project is planned to start construction in 2022 and open to traffic simultaneously with Longtan bridge by the end of 2024.
The cost of supporting business is slightly under pressure, and the profit of real estate business is flat
In terms of supporting business, the company’s gross profit from oil sales in 2021 was about 168 million yuan, a year-on-year decrease of 22.03%, and the total gross profit of supporting business was 1.437 billion yuan, a year-on-year decrease of 57%; In terms of real estate business, in 2021, the company achieved a sales area of 31000 square meters of commercial houses, realized a pre-sale income of 716 million yuan, carried forward the previous pre-sale income of 1.029 billion yuan, and realized a net profit after tax of about 76 million yuan, which was basically the same as that in the same period of last year.
The ecological and intelligent transportation industry in the service area is expected to build the second growth pole in the medium and long term
On the one hand, through the transformation and development of “double promotion” of the service area, the company has created a new image of the service area with distinctive theme and perfect service functions, created a “Ninghu brand”, formed a “Jiangsu effect” throughout the country, and created a “three fine”, “smart” and “green” service area. On the other hand, the company maintains the leading level in China on the road of digital infrastructure. The “14th five year plan” highway development plan of Jiangsu Province clearly proposes to comprehensively promote the intelligent transformation of Shanghai Nanjing Expressway and the future experience of Wufengshan intelligent expressway, and officially enter the stage of “intelligent maintenance”. China’s leading Luyan economic ecology and intelligent transportation layout may add icing on the cake to the steady operation of the company.
Profit forecast and valuation
We expect the net profit attributable to the parent company from 2022 to 2024 to be 4.65 billion yuan, 4.925 billion yuan and 5.205 billion yuan respectively, corresponding to 9.01 times, 8.51 times and 8.05 times of the current share price PE respectively. The company’s performance recovered, with the characteristics of steady and high dividend, and maintained the rating of “overweight”.
Risk warning: the charging policy of the industry is developing in an unfavorable direction; The growth of traffic flow is less than expected; New road cultivation period profit pressure.
