Guangshen Railway(SH:601333) HTSC·2025-03-28 06:52Investment Rating - The investment rating for the company is "Buy" for H-shares and "Overweight" for A-shares, with target prices set at HKD 2.86 and RMB 3.65 respectively [8][10]. Core Views - The company's 2024 annual report shows revenue of RMB 27.1 billion, a year-on-year increase of 3.4%, and a net profit attributable to shareholders of RMB 1.06 billion, a slight increase of 0.2% year-on-year. However, the Q4 results were disappointing, with a revenue of RMB 7.06 billion, a year-on-year increase of only 0.6%, and a net loss of RMB 149 million [1][2]. - The report indicates a weakening growth in passenger traffic in the second half of 2024, with overall passenger revenue growth of 2.5% for the year, but a decline in the second half [2][3]. - The company is expected to benefit from the planned upgrades of high-speed train stations and the potential appreciation of idle land around these stations [1]. Summary by Sections Passenger Transport - In 2024, passenger revenue grew by 2.5%, with first half growth at 2.7% and second half at 1.1%. The intercity train revenue increased by 8% in the first half but fell by 2% in the second half. Long-distance train revenue decreased by 9% overall [2][3]. Freight Transport - The company experienced a decline in freight revenue, with a 12% drop in cargo volume and an 11% decrease in freight income due to economic adjustments and reduced demand for bulk commodities [3]. Cost Structure - Operating costs increased by 3.4% in 2024, with employee compensation rising by 2.1% despite a 3.5% reduction in staff numbers. Equipment leasing and service fees also saw a 5% increase due to more train services [4]. Profit Forecast and Valuation - The company has adjusted its net profit forecasts for 2025 and 2026 downwards by 44% and 34% respectively, now projecting RMB 884 million and RMB 1.12 billion. The target prices for A and H shares have been revised down to RMB 3.65 and HKD 2.86 [5][15].