SDHS(600350) Xinda Securities·2024-11-12 09:03Investment Rating - The investment rating for Shandong Expressway (600350.SH) is "Buy" [1]. Core Views - The report highlights that the company achieved a revenue of 7.765 billion yuan in Q3 2024, representing a year-on-year increase of 19.33%. However, the net profit attributable to shareholders decreased by 2.74% to 883 million yuan. The report emphasizes the ongoing expansion and renovation of core road assets, which is nearing completion and is expected to enhance profitability [1][2]. Summary by Sections Financial Performance - In Q3 2024, the company reported a toll revenue of 2.912 billion yuan, down 2.42% year-on-year. For the first three quarters, toll revenue totaled 7.569 billion yuan, a decrease of 7.44% year-on-year. The decline in revenue is attributed to the opening of new routes and the impact of ongoing construction projects [1]. - The company’s total revenue for the first three quarters was 19.901 billion yuan, with a net profit of 2.516 billion yuan, reflecting a year-on-year decrease of 5.70% [1]. Business Segments - The toll revenue from the Jiqing Expressway was approximately 2.445 billion yuan, down 13.62% year-on-year, while the Jilai Expressway saw an increase of 18.98% in toll revenue due to increased traffic from newly opened sections [1]. - The report notes that the core road asset renovations are close to completion, with significant progress reported in various construction metrics, indicating potential for increased traffic and revenue post-completion [1]. Future Outlook - The forecast for net profit attributable to shareholders for 2024-2026 is projected at 3.305 billion yuan, 3.508 billion yuan, and 3.783 billion yuan, respectively, with corresponding PE ratios of 13.2, 12.4, and 11.5 [2]. - The report expresses optimism regarding the company's long-term development and shareholder returns, maintaining a "Buy" rating based on the expected uplift in profitability from completed infrastructure projects [2].