\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 012 Anhui Expressway Company Limited(600012) )
Event: the company achieved the consolidation of Anqing Yangtze River Bridge and Anhui section of YUEWU Expressway this year. According to the caliber after consolidation, the company achieved a revenue of 3.92 billion yuan, an increase of 33.6% compared with 2.93 billion yuan in the same period last year. The low base caused by high-speed free in the same period last year is the main reason for the significant growth of revenue. The revenue increased by 17.7% compared with the same period in 19 years. The growth was mainly due to the reconstruction and expansion of Hefei Nanjing Expressway and the significant increase in the revenue of Gaojie and Xuanguang roads. In 21 years, the company realized a net profit attributable to the parent company of 1.51 billion yuan, a record high, with a year-on-year increase of 62.7%; Compared with the same period in 19 years, it increased by 36.7%.
The original road production has achieved steady growth: the average daily revenue per kilometer of the company’s three core roads, Hefei Nanjing Expressway, Gaojie Expressway and Xuanguang expressway, increased by 11.1%, 17.1% and 14.2% respectively year-on-year, of which Hefei Nanjing Expressway mainly benefited from the improvement of traffic capacity brought by reconstruction and expansion; Gaojie Expressway benefits from the connection effect brought by the reconstruction and expansion of he’an expressway; The growth of Xuanguang expressway is mainly due to the reconstruction and expansion of parallel County Road x108, which leads to the diversion of some vehicles to Xuanguang expressway. Therefore, after the reconstruction and expansion of County Road, the income of Xuanguang expressway is expected to fall to a certain extent.
During the reporting period, the average daily income of national highway 205 and Nanjing Xuanzhou Hangzhou Expressway decreased significantly year-on-year, mainly due to the impact of road construction. However, due to its relatively low proportion of income, it did not affect the steady and good trend of the company’s overall income.
The Duantou road from Nanjing Xuanzhou Hangzhou Expressway to Nanjing is expected to be opened in 22 years, and the Duantou road to Hangzhou is expected to be opened in 23 years. At that time, it will increase the traffic flow and reverse the continuous loss of the road.
The free policy and connection effect bring strong growth expectation of new road purchase assets: the company spent 2.21 billion yuan to acquire 100% equity of Anqing bridge company this year, and the corresponding assets are anqing bridge and Anhui section of YUEWU expressway. During the reporting period, the bridge company realized a revenue of 472 million yuan and a net profit of 123 million yuan, which was in line with expectations.
From January 25, 22, Chizhou and Anqing Municipal governments reduced and exempted the tolls for small buses with “Wan R”, “Wan H” license sector numbers of 9 seats and below passing through Anqing Yangtze River Highway Bridge through financial subsidies. This is expected to significantly benefit the traffic flow of Anqing bridge, so as to increase the income of the bridge. In 2023, the two road properties acquired will also significantly benefit from the connection effect brought by the opening of the west section of Wuyue expressway. Therefore, it is expected that the net profit of Anqing Bridge Company will usher in a period of rapid growth from 22 to 23 years.
The dividend increased significantly compared with previous years: the dividend amount of the company remained unchanged from 2014 to 2020, all of which were 0.23 yuan / share. This year, the company has significantly increased the dividend ratio from about 40% last year to 60%, and promised that the cash dividend in the next three years will not be less than 60% of the net profit. With the significant increase of dividend ratio and net profit, the dividend amount of the company this year is much higher than that in any previous year, reaching 0.55 yuan / share (before tax).
Profit forecast and investment rating: we expect the net profit of the company from 2022 to 2024 to be RMB 1.66 billion, RMB 1.84 billion and RMB 2.01 billion respectively, corresponding to EPS of RMB 1.00, RMB 1.11 and RMB 1.21 respectively. The forecast is lower than before, mainly considering the impact of the epidemic. The PE of the company will be about 7.6 times in 2022, and the dividend yield is expected to reach 7.7%. Although the share price has increased significantly after the company announced to increase the dividend proportion, it still has high allocation value, so it maintains the “strongly recommended” rating.
Risk warning: uncertainty of service life extension of Hefei Nanjing Expressway; Ning Xuan hang Duantou road was opened later than expected; Lower than expected revenue from road property acquisition
