Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 5.90, indicating a potential upside of 64.8% from the current price of HKD 3.58 [3][12]. Core Insights - The company's net profit for the first half of 2024 decreased by 27% year-on-year to RMB 314 million, which was 14% lower than expectations due to lower gross margins and a loss from the expiration of the North Ring Road concession [2][7]. - The company expects improved performance in the second half of 2024, maintaining a dividend payout ratio target of 50-60% [2][12]. - The report highlights that the North Ring Road project transfer is ongoing, with a reported loss of RMB 20 million due to the expiration of its concession [2][10]. Financial Performance Summary - Revenue for the first half of 2024 was RMB 1.83 billion, down 5.6% year-on-year, with a gross margin contraction of 6.5 percentage points to 50.1% [7][11]. - The company's financial expenses decreased by 14% year-on-year to RMB 232 million, with an effective interest cost reduction to 2.93% [2][7]. - The net debt-to-equity ratio remained stable at 98.6% as of June 2024 [2][7]. Future Projections - The company projects a revenue of RMB 3.74 billion for the fiscal year 2024, with an expected adjusted net profit of RMB 808 million, reflecting a 6.6% decrease year-on-year [3][15]. - The report anticipates a gradual recovery in traffic volumes and toll revenues, particularly with the opening of the Shenzhen-Zhongshan Bridge [2][10]. Capital Expenditure Guidance - The company has guided for total capital expenditures of RMB 2 billion for the second half of 2024, including RMB 1.2 billion for the GNSR highway development project [2][10]. Shareholder Structure - The major shareholders include Guangzhou Yuexiu Holdings (44.2%) and China Merchants Highway (12.1%) [4]. Market Performance - The stock has shown a decline of 12.3% over the past month and 17.1% over the past six months, underperforming the market [4]. Valuation Metrics - The report indicates a price-to-earnings ratio of 6.8x for 2024E, which is slightly above the historical average of 6.0x [3][12].
越秀交通基建：上半年收益同比下降 27% ， 低于我们的预期 ； 预计下半年业绩会更好