\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 of 22q1 decreased by 30.5% year-on-year. Considering the impact of the epidemic, it is generally in line with expectations
On the revenue side, 22q1 achieved a revenue of 2.578 billion yuan, a year-on-year increase of 7.8%. Among them, toll revenue was affected by the epidemic in Shanghai and southern Jiangsu, with a year-on-year decrease of 7.9% to 1.823 billion yuan; The comprehensive income of merchants and ancillary businesses increased by 0.7 billion yuan year-on-year due to the rise of oil price; The scale of real estate business income benefited from carry over increased, with a year-on-year increase of 199.1% to 222 million yuan.
On the cost side, the operating cost of 22q1 was 1.345 billion yuan, with a year-on-year increase of 49.31%, mainly due to the comprehensive impact of the relatively rigid cost of toll roads, the decline of oil sales and price fluctuations, and the increase of real estate carry over scale.
On the profit and loss side, on the one hand, the performance of associated road and bridge enterprises declined, resulting in a year-on-year decrease of 26.3% in 22q1 investment income to 149 million yuan; On the other hand, after the Wufengshan bridge was put into operation in June last year, the interest expense increased by 71.7% year-on-year to 244 million yuan.
On the net profit side, the net profit attributable to the parent company in 22q1 was 795 million yuan, a year-on-year decrease of 30.5%; Net profit deducted from non parent company was 802 million yuan, a year-on-year decrease of 29.3%.
Pay attention to the repair of the epidemic in the short term, and pay attention to the steady growth of existing road production and the profitability of new roads in the medium and long term
Focus on the repair of the epidemic in the short term. As of 24:00 on April 28, 8 toll stations had been closed on expressways across the country, accounting for 0.07% of the total toll stations, down 98.8% from April 10; A total of 16 service areas were closed, accounting for 0.24% of the total number of service areas, down 95.6% from April 10. From April 20 to 28, the national highway truck traffic (Ministry of Communications) has increased by 5.2%, and the truck traffic reached 7.4591 million on April 28. In Jiangsu Province, from April 10 to 28, the vehicle cargo flow index (G7 IOT) has increased by 21.5%. The marginal improvement of epidemic control is expected to bring about the recovery of road freight and catalyze the recovery of the main business of the company’s Road products.
Pay attention to the steady growth of existing road products and the profitability of new roads in the medium and long term. The company’s existing mature Road products are concentrated in the Yangtze River Delta. The short-term epidemic does not change the medium and long-term trend of the hinterland economy, and the road flow can still maintain steady growth. In terms of putting the new road into operation, we should pay attention to the flow growth and profit transfer progress. Changyi Expressway and Yichang Changsha expressway will be opened to traffic in December 2020 and January 2021 respectively, and Wufengshan bridge will be opened to traffic in June 2021. There is great pressure on the fixed cost at the initial stage of the opening of the new road, with a net loss of 101 million yuan, 112 million yuan and 127 million yuan respectively in 2021. In addition, the Longtan bridge under construction and the proposed North connection project of Longtan bridge are expected to be opened to traffic by the end of 2024.
The change of amortization estimate is expected to increase the net profit of 184 million yuan in 22 years
Based on the difference between the actual traffic flow and the expected traffic flow of the company’s main toll roads in recent years, the Company re predicts the traffic flow in the future operation period, and the company will adjust the future applicable method for the amortization estimation of road and Bridge franchise rights from April 1. The company expects that the change of accounting estimates will reduce the amortization of intangible assets by 245 million yuan and increase the net profit by 184 million yuan in 2022.
It is proposed to acquire the spruce qingneng company under the group with a cash price of 2.457 billion yuan and cut into the field of environmental protection. The company plans to acquire 100% equity of spruce qingneng company from the shareholder Jiangsu jiaokong with a cash price of 2.457 billion yuan, and the delivery is expected to be completed within the year. The subject company is mainly engaged in photovoltaic and sea wind power generation. In 2021, the net profit increased by 266.8% year-on-year to 118 million yuan. The asset evaluation report predicts that the net profit in 2022 will further increase by 70.7% year-on-year to 202 million yuan. At present, the company holds 300MW and 113.1mw of offshore wind power and PV respectively, and shares 110MW and 3.5MW of offshore wind power and PV respectively. We estimate that this transaction corresponds to about 1.37 times of Pb valuation in 2021, and the consideration is reasonable as a whole.
Considering that the relevant assets of the company’s current core highway industry chain have qingneng consumption scenario and wind power photovoltaic business space along the way, we believe that the project has certain synergy with the company’s main business; In addition, the valuation of cash acquisition is reasonable. The company estimates that the expected annual return of the project is more than 10%, higher than that of highway business, which is expected to increase profitability.
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 8.8 times, 8.4 times and 7.9 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.
