Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - The company's operating performance in the first half of 2025 remained stable with a slight increase, and the growth trend of the maintenance business revenue and new orders was good. The company will continue to promote business development around multiple business segments and strive to achieve high - quality development [25][27]. 3. Summary by Directory 3.1. Research Basic Situation - The research object is Zhejiang Jiaoke, belonging to the engineering construction industry. The reception time was on August 29, 2025. The listed company's reception personnel included the board secretary, the financial director Zhao Junwei, Lin Nanfang from the board office (Strategic Development Department), and Du Guohai from the market operation department (International Department) [16]. 3.2. Detailed Research Institutions - The research institutions included securities companies such as Tianfeng Securities, GF Securities, and Changjiang Securities; asset management companies like Shanghai Jiuxiang Asset and Hangzhou Zhongbai Asset; investment companies such as Shanghai Xishirun Investment and Guangdong Zhengyuan Investment; other institutions including Fidelity International and Jmen Finance; fund management companies like Tongtai Fund and Huaxia Fund; and insurance asset management companies such as Great Wall Wealth Insurance [17][18]. 3.3. Research Institution Proportion - Securities companies accounted for 26%, asset management companies 17%, investment companies 17%, other institutions 13%, fund management companies 22%, and insurance asset management companies 4% [20]. 3.4. Main Content Data - **Zhejiang's 2025 Comprehensive Transportation Investment Plan**: In 2025, Zhejiang plans to complete 350 billion yuan of comprehensive transportation investment, aiming for 360 billion yuan. It will build 160 kilometers of expressways, 280 kilometers of ordinary national and provincial roads, add 5 coastal berths of over 10,000 tons and 50 kilometers of inland waterways for 1,000 - ton vessels. It will promote the preliminary work of key projects and ensure the start of 30 major projects, aiming for 40. It will also accelerate the construction of key projects and promote the "Four - Good Rural Roads" 2.0 version [24]. - **Controlling Shareholder's Transportation Infrastructure Investment Plan**: In 2024, Zhejiang Transportation Group completed 74.7 billion yuan of transportation investment, accounting for about 18% of the province. In 2025, it plans to complete over 73.9 billion yuan of transportation investment, promoting the start of multiple projects and accelerating the construction of ongoing projects [25]. - **Company's 2025 First - Half Operating Conditions**: The company achieved an operating income of 18.647 billion yuan, a year - on - year increase of 1.12%. The net profit attributable to the parent company was 545 million yuan, a year - on - year increase of 6.43% [25]. - **Company's Gross Margin Situation**: In the first half of 2025, the gross margin of the construction business was 9.15%, a year - on - year increase of 1.04%. The gross margin of the maintenance business decreased, but it is expected to improve later [26]. - **Company's Order Situation**: From January to June 2025, the company received 567 new orders worth 32.157 billion yuan, a decrease compared to the same period in 2024. As of the end of the first half of 2025, the total contract value of ongoing projects was 224.087 billion yuan, with 90.873 billion yuan of cumulative recognized revenue and 133.214 billion yuan of remaining unfinished work [27]. - **Company's Maintenance Business Development**: The company's maintenance business has formed professional and scale advantages. It will extend the investment - construction - maintenance integrated business, expand the market, and promote green maintenance [27]. - **Company's Investment - Type Projects**: The company's ongoing investment - type projects include various models such as equity cooperation, PPP, and area development. There are multiple ongoing PPP projects [28]. - **Yitong Special Foundation Situation**: Zhejiang Yitong Special Foundation Engineering Co., Ltd. and its subsidiary Zhejiang Zhongrui Heavy Industry Technology Co., Ltd. have strong technical strength and business scope, and Zhejiang Jiaotong has completed the equity acquisition and capital increase [28][29]. - **Company's Low - Altitude and Water Conservancy Business Layout**: The company's subsidiaries won bids for relevant projects, which are beneficial attempts for business diversification [29]. - **Company's New Equipment and New Material Business Development**: The company's new equipment and new material business is mainly carried out by subsidiaries. The new equipment business will be upgraded, and the new material business will be industrialized [29][30]. - **Company's Cash Dividend Plan**: The company's profit distribution considers multiple factors. In 2024, it distributed 334 million yuan in cash dividends, and it will optimize the dividend plan in the future [31]. - **Company's Future Development Plan**: The company is planning the "14th Five - Year" development plan, aiming to become a leading enterprise in new infrastructure and promote high - quality development around five major business segments [31].

Group 1: Investment Planning - Zhejiang Province plans to complete a total transportation investment of CNY 350 billion in 2025, aiming for CNY 360 billion [1] - Key projects include the construction of 160 km of expressways and 280 km of national and provincial roads, along with the addition of 5 coastal berths and 50 km of inland waterways [1] - Zhejiang Transportation Group aims to complete a transportation investment of CNY 739 billion in 2025, focusing on several major projects [2] Group 2: Financial Performance - In 2024, the company achieved a revenue of CNY 47.772 billion, a year-on-year increase of 3.75% [2] - The net profit attributable to shareholders was CNY 1.31 billion, a decrease of 2.78% compared to the previous year [2] - The company's cash flow from operating activities reached CNY 1.099 billion, a significant increase of 92.29% [2] Group 3: Business Operations - The company secured 1,021 new orders in 2024, with a total order value of CNY 71.088 billion [3] - As of the end of 2024, the total contract amount for ongoing projects was CNY 228.532 billion, with CNY 92.269 billion recognized as revenue [3] - The maintenance business generated CNY 4.797 billion in revenue, reflecting a year-on-year growth of 16.44% [3] Group 4: Profit Distribution - The company plans to distribute a cash dividend of CNY 1.25 per 10 shares, totaling CNY 334 million, which accounts for 25.48% of the net profit attributable to shareholders [4] - The profit distribution policy aims to ensure stability and continuity while considering the interests of all shareholders [4] Group 5: Future Development - The company is actively planning its "14th Five-Year" development strategy, focusing on five major business sectors: transportation infrastructure, urban construction, comprehensive maintenance, transportation manufacturing, and related industries [4] - The goal is to optimize the business structure and enhance overall development capabilities for high-quality growth [4]

Investment Rating - The report maintains a "Buy" rating for the company [10] Core Viewpoints - The company is positioned to benefit from high traffic investment in Zhejiang province, with 2024 traffic investment expected to reach a historical high of 4,093 billion, a year-on-year increase of 9.6% [7][74] - The company has a strong order backlog, with total contracts for ongoing projects amounting to 2,285.32 billion, of which 922.69 billion has been recognized as revenue [33] - The company aims for significant profit growth, with projected net profits of 1.46 billion, 1.60 billion, and 1.77 billion for 2024, 2025, and 2026 respectively, corresponding to current market valuations of 6.98, 6.38, and 5.75 times [8] Company Overview - The company, Zhejiang Jiaokao (002061.SZ), is a leading player in transportation infrastructure in Zhejiang province, focusing on engineering and construction [5][18] - Established in November 1998, the company was restructured from a state-owned entity and is controlled by the Zhejiang Provincial State-owned Assets Supervision and Administration Commission [5][28] - The company primarily engages in the investment, design, construction, maintenance, and management of transportation infrastructure projects, including roads, bridges, tunnels, and ports [5][18] Financial Performance - The company has shown stable revenue growth, with 2023 revenue reaching 461.46 billion and net profit of 14.22 billion, primarily driven by its subsidiary, Jiaokong Group [5][28] - The company has a strong focus on maintaining a low expense ratio, which has been decreasing from 2019 to 2023, indicating effective internal management [48] - The company has a positive cash flow trend, with a commitment to increasing cash dividends over the next three years [51] Market Environment - Zhejiang province's GDP growth target for 2025 is around 5.5%, with a focus on maintaining high levels of infrastructure investment [6][64] - The province plans to complete 3,500 billion in transportation investments in 2025, with a goal of becoming a national leader in traffic investment [7][74] - The company is expected to leverage its strong position in the local market, with over 60% of provincial highway investments being controlled by its parent company, Zhejiang Jiaotong [8]