cqrb(SH:600106) Southwest Securities·2024-07-04 02:00Investment Rating - The report suggests to pay attention to the company due to its stable main business and potential growth from its transformation efforts [1]. Core Viewpoints - The company holds the toll rights for the Jiahuajialing River Bridge, generating approximately 200 million CNY in cash flow annually over the past three years, with a cash balance of 1.353 billion CNY as of Q1 2024 [1]. - The company is transitioning towards the integrated circuit and high-tech sectors, with investments in the Jiaxing Linlan Equity Investment Partnership, indirectly holding 5.0978 million shares of Changfei Advanced, aiming to leverage its geographical advantages in Chongqing [1]. - The establishment of the "Big Fund Phase III" with a scale of 344 billion CNY provides a solid foundation for sustainable industrial development and presents opportunities for the company's transformation [1]. - The company’s toll revenue from the Jiahuajialing River Bridge is stable and not significantly affected by macroeconomic adjustments, with toll income of 114 million CNY in 2023 [1]. - The company has a diversified investment portfolio, including a 33% stake in Yufu Expressway and a 4.93% stake in Chongqing Bank, generating steady investment income [1]. Summary by Sections 1. Company Overview - Chongqing Road and Bridge Co., Ltd. is a state-owned enterprise engaged in urban road and bridge operations, infrastructure construction, investment, and real estate development, listed on the Shanghai Stock Exchange since 1997 [13]. 2. Existing Assets - The company has a clear asset structure with stable cash flows, primarily from the Jiahuajialing River Bridge BOT project, which has a revenue period until September 2034 [71]. - The company achieved an operating income of 1.17 billion CNY in 2023, with toll revenue contributing 1.14 billion CNY [17]. - Investment income has shown steady growth, with the company realizing 162 million CNY in investment income in 2023 [1]. 3. Strategic Transformation - The company is actively seeking opportunities in the integrated circuit and high-tech industries, with plans to invest in relevant companies to establish a second main business [57]. - The company has made investments in the Linlan Equity Investment Partnership and plans to invest in chip design through a partnership with Lanzhi Electronics Technology [90]. - The "33618" industrial development plan proposed by the Chongqing government aims to create multiple industrial clusters, which will benefit the company’s strategic transformation efforts [93]. 4. Financial Performance - The company’s net profit for 2024-2026 is projected to be 240 million, 230 million, and 230 million CNY respectively, with corresponding EPS of 0.18, 0.18, and 0.17 CNY [1]. - The company’s financial ratios indicate a healthy balance sheet, with a cash ratio of 2.56 and a current ratio of 3.15, ranking favorably among peers [77].