Investment Rating - The investment rating for Sichuan Chengyu (601107.SH) is "Buy" (maintained) [5] Core Views - The company plans to acquire 85% of the equity of Jingyi Expressway for cash of 2.409 billion yuan, which is expected to enhance the dividend yield starting in 2026 [7] - The acquisition is anticipated to solidify the company's revenue stream, as Jingyi Expressway has shown stable profitability with a projected net profit of approximately 1.92 billion yuan in 2024 and 1.49 billion yuan in the first seven months of 2025 [7] - The company is expected to achieve a net profit of 1.613 billion yuan in 2025, with a growth rate of 10.58%, and a projected dividend yield of around 5.1% in 2025, increasing to 6.2% in 2026 and 6.9% in 2027 [7] Financial Summary - The company's total revenue is projected to be 11.220 billion yuan in 2025, with a year-on-year growth rate of 8.28% [6] - The net profit attributable to the parent company is expected to reach 1.613 billion yuan in 2025, with a corresponding earnings per share (EPS) of 0.53 yuan [6] - The company's return on equity (ROE) is forecasted to be 8.47% in 2025, increasing to 9.90% in 2026 [6][8]

Investment Rating - The report gives a "Buy" rating for Sichuan Chengyu (601107.SH) based on its strategic advantages and high dividend potential [6][9]. Core Views - Sichuan Chengyu, as a subsidiary of Shudao Group, focuses on transportation infrastructure investment, operation, construction, and management, along with green energy investment and resource development [8][19]. - The company aims to enhance its road network scale and operational efficiency, projecting steady revenue growth, with expected revenues of 10.36 billion yuan in 2024 and a net profit of 1.46 billion yuan [8][11]. - The "Big Group + Small Company" strategy is expected to drive resource integration and operational efficiency, enhancing shareholder returns through a commitment to a minimum cash dividend payout ratio of 60% of net profit from 2023 to 2025 [8][11]. Summary by Sections Market Performance - As of June 6, 2025, the closing price is 6.39 yuan, with a total market capitalization of 19.54 billion yuan and a debt-to-asset ratio of 66.62% [4][7]. Financial Forecast and Valuation - Projected net profits for 2025-2027 are 1.56 billion, 1.69 billion, and 1.88 billion yuan respectively, with corresponding P/E ratios of 12.6, 11.6, and 10.4 [9][11]. - The company is compared with peers like Ninghu Expressway, Shenzhen Expressway, and Guangdong Expressway A, indicating a strong position in the western highway operation sector [9][11]. Business Structure - The core business includes highway bridge management and maintenance, contributing 46.10% to revenue in 2024, while construction services and sales from service areas account for 26.09% and 23.91% respectively [20][23]. - The company operates approximately 900 kilometers of highways, with ongoing projects adding another 136.1 kilometers, reflecting a compound annual growth rate (CAGR) of 5.91% in operational mileage from 2009 to 2024 [41][42]. Revenue and Profitability - The company’s revenue is expected to grow due to increased traffic and operational efficiency, with a projected revenue of 11.22 billion yuan in 2025, reflecting an 8.28% year-on-year growth [7][10]. - The average remaining toll collection period for the company's assets is 11.13 years, providing ample time for traffic growth and revenue realization [47]. Shareholder Returns - Sichuan Chengyu has a strong commitment to shareholder returns, having distributed over 5.9 billion yuan in cash dividends since its listing, with a planned minimum cash dividend payout ratio of 60% for the years 2023-2025 [37][38].