SDHS(600350) SINOLINK SECURITIES·2024-10-30 06:42Investment Rating - The report maintains a "Buy" rating for Shandong Expressway [1][10]. Core Views - The company reported a revenue of 19.901 billion RMB for Q3 2024, a year-on-year increase of 10.9%, but the net profit attributable to shareholders decreased by 5.7% to 2.52 billion RMB [1]. - The decline in toll revenue is attributed to a decrease in traffic volume, with toll income for the core asset, Jiqing Expressway, dropping by 13.6% [1][2]. - The company plans to invest approximately 6.875 billion RMB in the expansion project of Weilai Expressway, with an expected internal rate of return of 5.5% [3]. Summary by Sections Performance Analysis - For Q3 2024, the company achieved a revenue of 7.76 billion RMB, reflecting a 19.3% year-on-year growth, while the net profit attributable to shareholders was 880 million RMB, down 2.7% [1]. - The overall revenue growth is primarily driven by increased income from PPP project construction services, despite a 7.44% decrease in toll revenue due to reduced traffic [1][2]. Financial Metrics - The gross margin for Q3 2024 was 26.3%, a decline of 5.52 percentage points year-on-year, mainly due to the rise in zero-margin PPP construction income [2]. - The company reported an investment income of 966 million RMB for the first three quarters, a slight decrease of 0.25% year-on-year, with debt investment income increasing by 41.98% [2]. Future Outlook - The net profit forecasts for 2024-2026 have been revised down to 3.34 billion RMB, 3.76 billion RMB, and 4.49 billion RMB, respectively, due to the anticipated decline in traffic volume [3].