Zhongyuan Expressway(SH:600020) Zhongyuan Securities·2025-09-16 11:08Investment Rating - The report assigns a "Buy" investment rating for the company, indicating an expected price increase of over 15% relative to the CSI 300 index within the next six months [11]. Core Insights - The company reported a revenue of 3.105 billion yuan for the first half of 2025, representing a year-on-year growth of 13.17%. The net profit attributable to shareholders was 663 million yuan, up 7.68% year-on-year [5]. - The company's highway operation business is stable, with toll revenue increasing by 2.23% year-on-year. The construction service revenue saw a significant increase of 72.63%, contributing to the overall revenue growth [5][6]. - The company is the only publicly listed highway operator in Henan Province, managing a total of 808 kilometers of highways [5]. - The investment income from subsidiaries has been growing, with a reported investment income of 331 million yuan in 2024, a 158.80% increase year-on-year [7]. - The company has optimized its debt structure, resulting in a reduction of financial expenses by 18.75% to 373 million yuan in the first half of 2025 [9]. Summary by Sections Financial Performance - For the first half of 2025, the company achieved a basic earnings per share of 0.27 yuan, a year-on-year increase of 9.15%. The weighted average return on equity was 5.16%, up 0.2 percentage points from the same period in 2024 [5]. - The operating cash flow for the first half of 2025 was 1.146 billion yuan, a significant increase of 30.51% year-on-year [8]. Business Operations - The company is expected to benefit from the growth of the highway network in Henan Province, with the total operational mileage projected to exceed 10,000 kilometers by 2025 [6]. - The company has diversified its business operations, with significant contributions from construction services and real estate sales [5]. Future Projections - The company is projected to achieve net profits of 937 million yuan, 1.009 billion yuan, and 1.116 billion yuan for the years 2025, 2026, and 2027, respectively, with corresponding earnings per share of 0.42, 0.45, and 0.50 yuan [11].