SDHS(SH:600350) SINOLINK SECURITIES·2024-04-19 05:30Investment Rating - The report maintains a "Buy" rating for Shandong Expressway [2] Core Views - The company has shown a recovery in traffic volume, leading to an increase in revenue and absolute dividend value [2] - In 2023, the company achieved operating revenue of 26.546 billion RMB, a year-on-year increase of 18.62%, and a net profit attributable to shareholders of 3.297 billion RMB, up 8.47% year-on-year [2][6] - The company is expected to continue its highway construction, with revised net profit forecasts for 2023-2025 being 3.89 billion RMB, 4.41 billion RMB, and a new forecast for 2026 at 4.88 billion RMB [2] Summary by Sections Performance Analysis - The increase in revenue is attributed to the rise in service income from PPP projects and toll revenue [2] - Toll revenue from the company's core asset, the Jingtai Expressway, increased by 43.09% year-on-year due to the early opening of the upgraded section [2] - The railway business also saw a revenue increase of 16.10% and a net profit increase of 37.73%, driven by a 17.6% year-on-year growth in freight volume [2] Financial Metrics - The company's gross margin decreased to 30.4%, down 4.3 percentage points year-on-year, while the expense ratio improved to 13.28%, down 1.56 percentage points [2] - Investment income fell by 21.25% year-on-year to 1.371 billion RMB [2] - The proposed dividend for 2023 is 2.033 billion RMB, representing 61.66% of net profit, with a per-share dividend increase of 5% to 0.42 RMB [2] Future Outlook - The company is expected to continue its investment in highway expansion projects, with significant investments already made in 2023 [2] - The report anticipates steady growth in revenue and profit over the next few years, with a focus on maintaining high dividend payouts [2][6]