Daqin Railway(SH:601006) Changjiang Securities·2025-05-07 09:43Investment Rating - The investment rating for the company is "Buy" and is maintained [4]. Core Views - In 2024, the company's revenue is expected to decline significantly due to reduced coal production in Shanxi, leading to a drop in both volume and profit. However, by Q1 2025, coal production is anticipated to increase, allowing for a recovery in volume and a year-on-year growth in Q2 2025. The company maintains a dividend yield of approximately 4% at the cycle's bottom, highlighting its dividend attributes [3][8]. Summary by Sections Financial Performance - In 2024, the company achieved an operating revenue of 746.27 billion yuan, a decrease of 7.9% year-on-year, and a net profit attributable to shareholders of 90.39 billion yuan, down 24.2% year-on-year. For Q1 2025, the operating revenue was 178.01 billion yuan, a decline of 2.6% year-on-year, with a net profit of 25.71 billion yuan, down 15.6% year-on-year [3][8]. Dividend Policy - The company plans to implement a year-end dividend of 28.20 billion yuan, combined with a mid-year dividend of 23.60 billion yuan, resulting in a total cash dividend of 51.80 billion yuan for 2024, with a dividend payout ratio of 57.31% [3][8]. Volume and Profit Outlook - The Daqin Line's freight volume is expected to recover as Shanxi coal production increases. The company forecasts that the freight volume will gradually return to normal levels, with a year-on-year increase expected in Q2 2025. The anticipated net profits for 2025, 2026, and 2027 are projected to be 99.5 billion yuan, 111.1 billion yuan, and 121.3 billion yuan, respectively, with corresponding price-to-earnings ratios of 13.3, 11.9, and 10.9 times [3][8]. Cost and Revenue Dynamics - The company faced a significant decline in freight volume in 2024, with a 7.1% year-on-year drop to 392 million tons. Despite this, passenger transport and entrusted operation management saw growth, with passenger volume increasing by 8.3% to 46.41 million people and passenger revenue rising by 12.2% to 10.01 billion yuan [3][8]. Market Position and Future Prospects - The Daqin Railway is positioned to benefit from the long-term demand for coal transportation due to regional imbalances in coal supply. The company has established a comprehensive transportation network, which is expected to enhance operational efficiency and reduce ineffective investments [3][8].