Ganyue Expressway(600269) Huachuang Securities·2024-10-27 15:19Investment Rating - The report maintains a "Strong Buy" rating for the company with a target price of 6 CNY, representing a 20% upside from the current price of 4.98 CNY [2][3]. Core Insights - The company reported a significant increase in net profit for Q3 2024, reaching 525 million CNY, which is a 6.25% year-on-year growth. However, cumulative operating revenue for the first three quarters was 4.56 billion CNY, reflecting a 23.52% decline compared to the previous year [2][3]. - The growth in net profit is primarily attributed to the increase in the stock price of its financial asset, Guosheng Jin控, while the decline in operating revenue is linked to a decrease in non-highway revenue and high base effects from last year's income recognition in smart transportation and real estate [2][3]. - The company has optimized its cost structure, achieving a gross margin increase for three consecutive quarters, with a cumulative savings of 37 million CNY this year [2][3]. Financial Performance Summary - For Q3 2024, the company achieved a toll revenue of 955 million CNY, a 2% year-on-year increase, and a net gain from fair value changes of 328 million CNY [2][3]. - The report projects net profits for 2024, 2025, and 2026 to be 1.298 billion CNY, 1.412 billion CNY, and 1.479 billion CNY respectively, with corresponding EPS of 0.56 CNY, 0.60 CNY, and 0.63 CNY [2][3]. - The company’s total revenue for 2023 is estimated at 7.492 billion CNY, with a year-on-year growth rate of 10.9% [3]. Investment Recommendations - The report emphasizes the clear optimization potential for the company, highlighting that the asset value is undervalued. The financial costs are expected to improve significantly as high-interest debts mature, and the company is set to benefit from lower financing rates for its short-term bonds [2][3]. - The report also notes that the remaining toll collection periods for certain highways provide new growth potential, with significant expansions planned for the Changjiu and Changzhang highways [2][3].