Sichuan Express(SH:601107) Huachuang Securities·2024-03-29 16:00Investment Rating - The report maintains a "Strong Buy" rating for Sichuan Chengyu (601107) [17] Core Views - The company's profitability from road assets has significantly improved, with a proposed dividend of 62% for 2023, indicating a strong commitment to shareholder returns [17] - The main business growth potential is emphasized, supported by the company's resource advantages and proactive strategies [17] Summary by Sections Financial Performance - In 2023, the company achieved a revenue of 11.652 billion, a year-on-year increase of 10.1%, and a net profit attributable to shareholders of 1.187 billion, up 90.2% [17] - The quarterly net profits for Q1 to Q4 were 440 million, 340 million, 340 million, and 70 million respectively, with Q4 being lower due to higher maintenance costs [17] - The board proposed a cash dividend of 2.4 yuan per 10 shares, representing 61.83% of the net profit attributable to shareholders [17] Revenue from Toll Roads - The revenue from various toll roads showed significant growth, with the second Western Sichuan Expressway surpassing Chengyu Expressway as the third-largest revenue contributor [17] - The revenues from Chengyu, Chengya, Chengren, Chengle, and other expressways were reported with year-on-year growth rates ranging from 16.7% to 34.73% [17] Profitability Improvement - The profitability of major road assets has improved significantly, with net profits exceeding 2019 levels [17] - The company has seen a reduction in losses from Suiguang and Suixi roads, with the latter achieving its first profit of 26 million [17] Investment Projections - The report projects net profits of 1.304 billion, 1.427 billion, and 1.596 billion for 2024, 2025, and 2026 respectively, with corresponding EPS of 0.43, 0.47, and 0.52 [17] - The target price is set at 6.4 yuan, indicating a potential upside of 22% from the current price of 5.22 yuan [17]