SDRB(SZ:000498) ZHONGTAI SECURITIES·2025-02-21 13:02Investment Rating - The report assigns a "Buy" rating for the company, indicating an expected relative performance increase of over 15% compared to the benchmark index within the next 6 to 12 months [4][62]. Core Insights - The company, Shandong Road and Bridge, has a long history and a national presence, having been established in 1948 and listed in 2012. It has a strategic focus on both domestic and international markets, particularly in infrastructure projects [4][7]. - The company is backed by state-owned assets from Shandong, with a concentrated shareholding structure, where the largest shareholder holds 55.68% of the shares [10]. - The company has shown steady business progress, with a continuous increase in contract scale. In the first half of 2024, the company signed new contracts worth 746.6 billion yuan, a year-on-year increase of 11.7% [5][21]. - Revenue has been maintained with a total of 426.8 billion yuan in the first three quarters of 2024, despite a year-on-year decline of 6.3%. The net profit attributable to shareholders was 14.6 billion yuan, reflecting a 3.5% increase year-on-year [5][30]. - The company is expected to benefit from policies aimed at stabilizing the economy and resolving local debts, which may enhance its ability to meet market demand in the future [5][54]. Summary by Sections Company Overview - Shandong Road and Bridge was established in 1948 and has evolved into a leading player in infrastructure construction, with a focus on both domestic and international projects [4][7]. - The company has received numerous national and international awards and holds over 2,000 patents, with an annual construction capacity of 50 billion yuan [7]. Business Performance - The company's main revenue source is road and bridge engineering construction, which accounted for 89% of total revenue in the first half of 2024, amounting to 253.7 billion yuan [5][21]. - The company has a diverse portfolio, including road maintenance, concrete production, equipment leasing, and engineering consulting, with significant experience in various construction management fields [5][21]. Financial Performance - The company has shown a stable financial performance, with a net profit margin of 4.2% and a return on equity (ROE) of 6.2% in the first three quarters of 2024 [5][30]. - The company’s asset-liability ratio was 77.25%, a slight decrease from the previous year, indicating stable debt management [5][44]. Profit Forecast - The company is projected to achieve net profits of 2.46 billion, 2.62 billion, and 2.75 billion yuan for the years 2024 to 2026, respectively, with corresponding price-to-earnings (P/E) ratios of 3.6, 3.4, and 3.3 [5][54]. Investment Recommendation - Given the company's strong order book and favorable market conditions, it is recommended as a "Buy" with expectations of significant growth in the coming years [5][54].