Sichuan Express(SH:601107) Huachuang Securities·2024-04-29 16:31Investment Rating - The report maintains a "Strong Buy" rating for the company [12][25]. Core Views - The company reported Q1 2024 net profit attributable to shareholders of 390 million yuan, a year-on-year decrease of 13.2%, primarily due to base effect factors and increased financial expenses from acquisitions [1]. - Q1 2024 operating revenue was 2.01 billion yuan, down 8.52% year-on-year, attributed to the progress of renovation and expansion projects affecting construction service revenue [1]. - Financial expenses have been decreasing, with Q1 2024 expenses at 208 million yuan, down 5% from Q4 2023 and 36.8% from Q2 2023, indicating improved financial structure and lower interest rates [1]. - The company's road asset profitability significantly improved in 2023, exceeding 2019 levels, with net profit from major road assets reaching 1.162 billion yuan, a year-on-year increase of 76.9% [1]. - The company has set a target price of 6.4 yuan, representing a potential upside of 16% from the current price, with a projected dividend yield of 4% for 2024 [1][25]. Financial Summary - Q1 2024 net profit attributable to shareholders: 390 million yuan, down 13.2% year-on-year [1]. - Q1 2024 operating revenue: 2.01 billion yuan, down 8.52% year-on-year [1]. - Q1 2024 financial expenses: 208 million yuan, down 5% from Q4 2023 [1]. - 2023 net profit from major road assets: 1.162 billion yuan, up 76.9% year-on-year [1]. - 2024-2026 projected net profits: 1.3 billion, 1.43 billion, and 1.6 billion yuan respectively [1].