Core Viewpoint - Southwest Securities has initiated coverage on Yuexiu Transportation Infrastructure (01052), the first highway red-chip stock listed in Hong Kong, with a "Buy" rating and a target price of HKD 5.73, anticipating the company to become a leading transportation infrastructure asset management firm in China [1]. Group 1: Company Performance - The company is strengthening its toll road business through continuous asset optimization, with projected overall revenue growth of 14.9% to CNY 2.099 billion in the first half of 2025, aided by the inclusion of the Pinglin Expressway in November 2024 [2]. - The company has maintained a stable and sustainable dividend policy since 2010, distributing approximately 50% to 60% of net profit attributable to shareholders as dividends annually [2]. - As of 2025, the company expects a net profit attributable to shareholders to grow by 14.9% to CNY 361 million [3]. Group 2: Industry Context - The highway industry in China has entered a mature phase, having completed over 70% of the mileage targets set in the National Comprehensive Transportation Network Planning Outline, with overall industry revenue steadily recovering post-pandemic [4]. - The rising costs of new road construction may lead to a revenue gap, which could be addressed through policy iterations and business diversification, as new regulations are anticipated to break the original toll duration trends [4]. Group 3: Investment and Asset Management - The company has established a unique asset layout with significant regional advantages and operational efficiency, having incubated highway assets worth nearly CNY 25 billion over the past five years [5]. - The successful establishment of a REITs platform in 2021 marks the formation of a three-platform structure (incubation platform, listed company, public REITs), enabling the company to utilize diverse financing tools and channels to optimize its capital structure [5].