Core Viewpoint - Dongxing Securities reports that Yuexiu Transportation Infrastructure (01052) plans to acquire 85% equity of the Qinbin Expressway from the Luji boundary to Zhanhua section for 1.154 billion yuan, with the asset covering a total of 60.7 kilometers and a remaining toll collection period of slightly over 20 years. The acquisition is expected to enhance the company's performance and the prospects of the Guangzhou North Second Ring Expressway expansion, maintaining a "strongly recommended" rating for the company [1]. Group 1 - The Qinbin Expressway connects multiple ports in the Bohai Bay, showcasing significant geographical advantages. It serves as the fastest coastal expressway in the Bohai Rim, starting from Qinhuangdao Port and extending southward through Tianjin Port and Huanghua Port to Zhanhua District in Shandong [2]. - As a four-lane expressway, the Qinbin Expressway demonstrates excellent revenue-generating capabilities. The revenue for the years 2023, 2024, and 2025 from January to August is reported as 563 million, 752 million, and 546 million yuan respectively, indicating a daily average revenue per kilometer of 25,000, 34,000, and 37,000 yuan [3]. - The revenue per kilometer of 25,000 yuan is considered top-tier among four-lane expressways, despite the contribution from the Zhangwei New River Bridge toll fees potentially inflating this figure. The Qinbin Expressway's revenue generation capacity is already higher than that of all other controlled road assets outside the Guangzhou North Second Ring [3]. Group 2 - The acquisition price is deemed reasonable, with an internal rate of return (IRR) calculated at 10.43%. The total enterprise value (EV) of the project, including equity consideration and total liabilities, amounts to 6.225 billion yuan, translating to a unit cost of just over 1 billion yuan per kilometer [4]. - The remaining toll collection period is substantial, with the section from Chengkou to Zhanhua expiring on November 15, 2045, and the Luji boundary to Chengkou section (including the Zhangwei New River Bridge) expiring on January 20, 2047. This long remaining toll period contributes to the calculated IRR exceeding 10% [4]. Group 3 - The project is expected to enhance the company's performance and operational capacity. If the acquisition is completed, the weighted average remaining toll collection period of the company's controlled expressways will extend by approximately 0.8 years. The projected net profits for the years 2026, 2027, and 2028 are estimated at 124 million, 162 million, and 195 million yuan respectively, with an anticipated annual profit increase of around 100 million yuan for 2026 [5]. - Without considering the acquisition of the Qinbin Expressway, the company forecasts net profits of 755 million, 769 million, and 822 million yuan for the years 2025 to 2027, corresponding to price-to-earnings ratios (PE) of 8.7X, 8.6X, and 8.0X. The acquisition is expected to further bolster the company's earnings in 2026 and beyond [6].