The Zhitong Finance App learned that CICC released a research report saying that considering Yuexiu Transportation Infrastructure (01052)'s steady dividend, maintaining the “outperforming industry” rating, considering that amortization costs exceeded the forecast, reduced net profit in 2024 by 24.9% to 821 million yuan, and introduced 2025 profit of 862 million yuan, with a target price of HK$5.19. The company's revenue in 2023 was 3.97 billion yuan, up 20.6% year on year; net profit to mother was 770 million yuan, up 68.9% year on year. As the company's depreciation and amortization costs exceeded the bank's expectations and Guangdong Shantou Bay Bridge's estimated impairment value of 100 million yuan, the performance was lower than the bank's forecast. In 2023, the dividend was HK$0.3 per share, and the dividend ratio reached 59.8%.

The main views of CICC are as follows:

Traffic picked up across the board in 2023, and toll revenue increased 20.3% year over year.

Benefiting from the recovery of residents' travel in 2023, the company's participation in road traffic resumed growth. Combined with Lanwei Expressway, which was acquired and listed in November 2022, it recorded full annual revenue in 2023. As a result, the company achieved toll revenue of 3.84 billion yuan, an increase of 20.3% over the previous year. Among them, the Guangzhou North Second Ring Expressway achieved toll revenue of 1.11 billion yuan in 2023, an increase of 12.7%; road production performance in Hubei was excellent, with toll revenue of the Yuenan/Hancai/Han'e/Daguangnan Expressway increasing by 13.1%/20.6%/7.8%/17.4% year on year respectively; road production in Henan declined slightly, and toll revenue for the Yuxu/Lanwei Expressway in 2023 fell 3.2%/6.3% year on year, respectively, mainly due to road control measures in surrounding areas in 2022 that diverted trucks to highways and truck charges were high. The base is relatively high.

In the short term, traffic is expected to maintain steady growth in 2024.

In terms of buses, according to the Ministry of Transport, the number of non-commercial passenger passenger trips during the 2024 Spring Festival travel season increased 5% year on year, up 31% from 2019. According to traffic planning research, the average daily motor vehicle traffic volume on the national highway section during the Spring Festival holiday increased 15.9% year on year, up 10.9% from 2019, and the scale of self-driving travel reached a record high. In terms of trucks, according to the Ministry of Transport, highway truck traffic increased 4.7% year-on-year in January-February. Therefore, the bank believes that the increase in highway traffic is expected to remain steady in 2024.

In the medium to long term, performance is growing, and the dividend ratio is high.

In terms of growth, according to the company's announcement, the company expects the entire renovation and expansion of the Guangzhou North Second Ring Expressway, which is the core road product, to begin in June 2024. The bank believes that it is expected to further improve traffic capacity and extend the toll period after completion. Furthermore, the bank believes that the Shandong Qinbin Expressway and Henan Pinglin Expressway, which were acquired by Yuexiu Group, are expected to be injected into listed companies later to further expand the size of the company's assets. Judging from the dividend rate, the company's dividend ratio is high. According to the bank's estimates, the 2024/2025 dividend rate corresponding to the current price is 7.8%/8.6%, which is attractive.

Risk warning: The fee policy was adjusted, and the economic growth rate fell short of expectations.