Guangshen Railway(SH:601333) Changjiang Securities·2025-03-29 10:43Investment Rating - The investment rating for the company is "Buy" and is maintained [7]. Core Views - The company's performance in the first half of 2024 is expected to differ significantly from the second half, primarily due to the transition to high-speed rail operations. The company is viewed positively for its cyclical growth potential as a high-speed rail operator, but the transition process is anticipated to involve challenges, including the exit from conventional rail operations and the cultivation of high-speed rail services, which will require time and costs [2][6]. - In 2024, the company achieved an operating revenue of 27.09 billion yuan, a year-on-year increase of 3.4%, and a net profit attributable to shareholders of 1.06 billion yuan, a slight increase of 0.2%. However, in Q4 2024, the company reported an operating revenue of 7.06 billion yuan, a year-on-year increase of 0.6%, but a net profit loss of 149 million yuan, a significant decline of 479.0% [4][6]. Summary by Sections Financial Performance - In 2024, the company’s operating revenue was 27.09 billion yuan, with a year-on-year growth of 3.4%. The net profit attributable to shareholders was 1.06 billion yuan, reflecting a growth of 0.2%. In Q4 2024, the operating revenue was 7.06 billion yuan, with a slight increase of 0.6%, but the net profit was a loss of 149 million yuan, down 479.0% year-on-year [4][6]. - The company plans to distribute a cash dividend totaling 496 million yuan, with a per-share dividend of 0.07 yuan [4]. Business Transition - The company is transitioning from conventional rail operations to high-speed rail operations, which has led to a decline in profitability and scale. The transition is expected to take about ten years, during which the company will face challenges in exiting conventional rail services and developing high-speed rail operations [6]. - The company’s two high-speed rail services are at different stages: the cross-border high-speed rail service is profitable, while the newly opened Guangshan high-speed rail service is still in the cultivation phase [2][6]. Future Projections - The company is expected to see a gradual increase in net profit over the next few years, with projected profits of 1.29 billion yuan, 1.44 billion yuan, and 1.55 billion yuan for 2025, 2026, and 2027, respectively. The corresponding price-to-earnings ratios are expected to be 16.9 times, 15.1 times, and 14.1 times [6].