LYCG(SH:600491) Xin Lang Cai Jing·2025-04-09 06:45Core Viewpoint - Longyuan Construction has successfully passed the Shanghai Stock Exchange review for a private placement, with Hangzhou Transportation Investment becoming the controlling shareholder, injecting 1.846 billion yuan and holding 29.51% of the shares, which is expected to improve the company's financial situation and operational capacity [1][2]. Group 1: Financial Performance - Longyuan Construction forecasts a net loss of 400 million to 600 million yuan for 2024, significantly reducing losses compared to the previous year [1]. - The company expects a substantial reduction in losses for Q4 2024, with a projected net profit range of -84 million to -284 million yuan, compared to -733 million yuan in Q4 2023 and -1.311 billion yuan for the entire year of 2023 [1]. - The company has reduced some operating expenses, contributing to the decrease in losses, and anticipates a potential turnaround to profitability following the completion of the private placement [1]. Group 2: Debt Management and Asset Valuation - The company holds approximately 34 billion yuan in PPP assets, with over 800 million yuan in impairment losses recognized as of H1 2024, and debt replacement efforts are expected to enhance government repayment capabilities, reducing future asset impairment expectations [2]. - Following the entry of Hangzhou Transportation Investment, the company's financial pressure is expected to ease, potentially leading to a significant reduction in financing costs, with 2023 financial expenses at 1.5 billion yuan and a financing cost rate of 6.94% [2]. Group 3: Order Book and Market Position - As of Q3 2024, Longyuan Construction's order backlog totals 8.705 billion yuan, indicating a low business valuation relative to its revenue of 9.004 billion yuan in 2023 [2]. - The company has secured several local projects in Hangzhou through Hangzhou Transportation Investment, including significant contracts for infrastructure development [2]. - The completion of the private placement will position Longyuan Construction as the only publicly listed platform with top-tier construction qualifications in Hangzhou, expanding its project opportunities both locally and in other regions [2]. Group 4: Profit Forecast and Valuation - As a domestic infrastructure player, Longyuan Construction is less affected by export tariffs and fluctuations in household income, with a focus on valuation recovery in the short term and growth potential from state-owned enterprise orders in the medium to long term [3]. - Revenue projections for 2024-2026 are estimated at 9.67 billion yuan, 11 billion yuan, and 16.15 billion yuan, respectively, maintaining a "strong buy" rating [3].