Sichuan Express(601107) Huachuang Securities·2024-10-31 13:47Investment Rating - The report maintains a "Strong Buy" rating for Sichuan Chengyu (601107) [1][3] Core Views - The company's Q3 performance shows a significant year-on-year net profit growth of 25.1%, while the cumulative net profit for the first three quarters remains stable with a slight increase of 0.3% [1] - The decline in revenue is attributed to a reduction in ongoing projects rather than a drop in core business income, with Q3 performance driven by increased toll revenue, growth in oil and new energy businesses, and cost optimization [1] - The acquisition of Hubei Jingyi Expressway is expected to positively impact the company by increasing operational mileage and enhancing long-term development support from the controlling shareholder [1] Financial Summary - Q3 revenue was 1.99 billion yuan, a decrease of 14% year-on-year, while cumulative revenue for Q1-3 was 7.36 billion yuan, down 7.9% [1] - Cumulative net profit for Q1-3 reached 1.12 billion yuan, reflecting a 0.3% increase year-on-year [1] - Q3 gross profit was 900 million yuan, up 14.4% year-on-year, with financial expenses reduced by 18 million yuan compared to the previous year [1] - The forecast for net profit for 2024-2026 is 1.28 billion, 1.39 billion, and 1.55 billion yuan respectively, with corresponding EPS of 0.42, 0.46, and 0.51 yuan [1][2] Valuation and Target Price - The target price is set at 6.83 yuan, representing a 27% upside from the current price of 5.36 yuan, based on a 60% dividend payout ratio and a projected dividend yield of 4% for 2025 [1][3]