Core Viewpoint - Ninghu Expressway reported a decline in revenue and net profit for the first half of 2025, primarily due to reduced investment income from joint ventures and adjustments in dividend cycles from Jiangsu Bank [1][2] Financial Performance - The company achieved an operating revenue of 9.406 billion yuan, a year-on-year decrease of 5.6%. Excluding construction revenue, the revenue decline was 0.99%, indicating stable core business operations [1] - The net profit attributable to shareholders was 2.424 billion yuan, down 11.8%, influenced by reduced investment income and changes in the dividend cycle from Jiangsu Bank [1] Toll Revenue - In the first half of 2025, toll revenue reached approximately 4.6 billion yuan, reflecting a year-on-year growth of about 1.65%. The growth rate varied across major routes due to reconstruction and expansion impacts [1] Dividend Adjustments - Jiangsu Bank's dividend cycle adjustment led to a mid-term dividend of approximately 168 million yuan for the first half of 2025, a significant decrease of 54.38% compared to the full-year dividend of 368 million yuan in the same period of 2024 [1] Infrastructure Development - The core road asset expansion and reconstruction are ongoing, with the Ningyang Yangtze River Bridge northern connection project expected to open by the end of 2025, and the southern section of the Xiyi Expressway projected to be operational by June 2026, which is anticipated to significantly improve regional traffic flow [2] Technological Advancements - The company is developing a new ecological model for safe and intelligent management of highway maintenance, integrating real-time drone data with human expertise to enhance rescue efficiency and optimize core network capacity [2] Investment Outlook - Based on the 2025 mid-term report, the company maintains its previous profit forecast, expecting net profits of 5.447 billion yuan, 5.790 billion yuan, and 6.049 billion yuan for 2025E-2027E, with corresponding PE multiples of 8, 7, and 7 [2]

Investment Rating - The report maintains a "Buy" rating for Ninghu Expressway [2][8] Core Views - The company's performance in H1 2025 was slightly below expectations, with total revenue of 9.406 billion yuan, a year-on-year decrease of 5.6%. Excluding construction revenue impacts, revenue decreased by 0.99%, indicating stable core operations [8] - The decline in net profit attributable to shareholders was 11.8%, amounting to 2.424 billion yuan, primarily due to reduced investment income from joint ventures and adjustments in the dividend cycle of Jiangsu Bank [8] - Toll revenue showed a slight increase, with approximately 4.6 billion yuan in H1 2025, reflecting a year-on-year growth of about 1.65%. The growth rate varied across major routes due to expansion impacts [8] - The company is advancing its core asset expansion projects, with significant improvements expected in regional traffic flow upon completion of key projects by the end of 2025 and mid-2026 [8] - The report forecasts net profits for 2025E-2027E at 5.447 billion yuan, 5.790 billion yuan, and 6.049 billion yuan, corresponding to PE multiples of 13, 12, and 11 respectively [8] Financial Data and Profit Forecast - Total revenue projections for 2025E are 23.935 billion yuan, with a year-on-year growth rate of 3.2% [7] - The expected net profit for 2025E is 5.447 billion yuan, with a projected EPS of 1.08 yuan per share [7] - The gross profit margin is anticipated to be 27.1% for 2025E, with a return on equity (ROE) of 12.7% [7]