Core Points - The provincial finance department allocated nearly 6.5 billion yuan for transportation maintenance in the first half of the year, significantly supporting the management and maintenance of highways and waterways [1] - A total of 4.6 billion yuan was designated for the maintenance and management of ordinary national and provincial roads [1] - The province's rural road conditions have improved, with the excellent road rate for county roads reaching 92% and for rural roads at 85%, leading the nation [1] Funding Allocation - 6.5 billion yuan allocated for various transportation maintenance funds [1] - 4.6 billion yuan in subsidies for ordinary national and provincial road maintenance [1] - 800 million yuan allocated for rural road bridge renovations and daily maintenance [1] - 1.06 billion yuan designated for inland waterway and lock maintenance [1] Maintenance Progress - 725.4 lane kilometers of road surface repair initiated, with 398.8 lane kilometers completed [1] - 427.4 lane kilometers of preventive maintenance started, with 116.1 lane kilometers completed [1] - 55 bridges under renovation, with 8 completed, and 16 bridges under preventive maintenance, with 1 completed [1] Infrastructure Status - The province has a total of 24,000 kilometers of inland waterways, ranking first in the country [1]

Core Viewpoint - Zhejiang Jiaokao has secured significant contracts, indicating a strong position in the infrastructure sector and a stable revenue stream supported by its parent company, Zhejiang Transportation Group [1][8]. Group 1: Recent Contracts and Orders - On June 20, Zhejiang Jiaokao announced it became the first candidate for a major project on the 638 National Road, with a proposed bid of 1.897 billion yuan [1][3]. - In Q1 2025, the company secured 334 new orders amounting to 18.575 billion yuan, with 318 projects signed and 16 projects pending [6]. - The company has a total of 1.32516 billion yuan in uncompleted contracts as of the end of Q1 2025 [6]. Group 2: Financial Performance - In 2024, the company reported revenue of 47.772 billion yuan, a year-on-year increase of 3.75%, while net profit slightly decreased by 2.78% to 1.31 billion yuan [2][9]. - For Q1 2025, revenue reached 8.171 billion yuan, up 5.74% year-on-year, and net profit increased by 18.82% to 221 million yuan [2][9]. - The total assets of the company exceeded 73.85 billion yuan by the end of Q1 2025, reflecting a 14.06% year-on-year growth [2][9]. Group 3: Market Position and Strategy - Since refocusing on infrastructure in 2021, the company has seen a significant increase in contract signings, with a record high of 95.212 billion yuan in new contracts in 2023 [5]. - The company is actively expanding its market presence both domestically and internationally, with operations in over 20 countries and across more than 30 provinces in China [10]. - The parent company, Zhejiang Transportation Group, plays a crucial role in stabilizing the company's profitability and supporting its growth in the infrastructure sector [8][9].

Investment Rating - The report gives a "Buy" rating for the company, indicating a positive outlook for investment [4]. Core Views - The company, Zhejiang Jiaokao, is positioned as a leading player in regional transportation infrastructure, with significant recovery in performance expected due to increased provincial investment in transportation projects [1][2]. - The company has a strong backing from its major shareholder, Zhejiang Provincial Transportation Investment Group, which is expected to drive continued growth in orders and revenue [3][4]. - The recent stock incentive plan aims for a stable growth target of 6%, enhancing investor confidence in the company's long-term value [4]. Summary by Sections Company Overview - Zhejiang Jiaokao has transitioned from a chemical-focused company to a transportation infrastructure leader after divesting its chemical business in 2021 [1][14]. - The company has shown a significant recovery in its operating performance, with a 3.2% increase in revenue in Q1-3 2024 compared to the previous year [18][20]. Industry Analysis - Zhejiang Province has robust fiscal strength, ranking third nationally in comprehensive financial capacity, which supports ongoing infrastructure investments [2][31]. - The province's fixed asset investment has maintained a high growth rate, with a compound annual growth rate (CAGR) of 8.5% from 2015 to 2023 [2][31]. Order and Revenue Growth - The company has a substantial backlog of orders, and with the expected acceleration in project execution, revenue growth is anticipated to pick up significantly starting in 2025 [3][4]. - The company’s net profit for Q1-3 2024 reached 840 million, reflecting an 11% year-on-year increase, indicating a strong recovery trajectory [1][20]. Financial Performance and Projections - The report forecasts net profits of 1.48 billion, 1.66 billion, and 1.83 billion for 2024, 2025, and 2026 respectively, with corresponding growth rates of 10%, 12%, and 10% [4][6]. - The company's earnings per share (EPS) are projected to increase from 0.57 in 2024 to 0.70 in 2026, suggesting a positive trend in profitability [4][6].