SDHS(600350)2025-04-07 16:27Summary of Shandong Expressway Conference Call Company Overview - Company: Shandong Expressway - Year: 2024 Key Financial Data - Total Revenue: 28.494 billion CNY, up 7.34% year-on-year [3] - Net Profit Attributable to Shareholders: 3.196 billion CNY, down 3% year-on-year [3] - Net Profit Excluding Non-recurring Items: 2.914 billion CNY, down 0.5% year-on-year [3] - Net Cash Flow from Operating Activities: 6.841 billion CNY, up 13% year-on-year [3] - Basic Earnings per Share: 0.54 CNY, down 5.9% year-on-year [3] - Weighted Average Return on Equity: 8.95% [3] Revenue Breakdown - Toll Revenue: 9.928 billion CNY, down 5.9% year-on-year, primarily due to the diversion effect from the opening of the Jixin Expressway [3][5] - Jixin Expressway Toll Revenue: 3.167 billion CNY [5] - Jing-Tai Expressway Toll Revenue: 2.167 billion CNY, slight increase of 0.1% [5] Project Developments - TG Project Investment: 2.588 billion CNY, with 90% of the subgrade and 75% of the pavement completed [6] - Jing-Tai Expressway: Fully restored two-way traffic as of December 20, 2023 [6] - Acquisition: 100% control of Central Southeast Expressway and investment in HeYue Expressway [6] Other Business Segments - Rail Transit Group Revenue: 4.846 billion CNY, up 0.5% year-on-year; net profit down 3.5% to 430 million CNY [7] - Shandong High-Speed Rail Revenue: 4.4 billion CNY, up 2.5%; net profit up 17% to 369 million CNY [7] - Total Investment Income: 1.403 billion CNY, up 2.33% year-on-year [7] Traffic Flow and Future Expectations - Jixin Expressway: Daily toll revenue decline stabilized at 6%-8%, mainly affecting passenger vehicles [8] - Jilai Expressway: Overall traffic volume expected to return to reasonable growth rates in 2025 [9] - Wujin and Luzhu Expressways: Show signs of recovery after negative growth in 2024 [10] Capital Expenditure and Financing - 2025 Capital Expenditure Plan: 3.5 billion CNY, focusing on geometric and future projects [19] - Financing Strategy: Plans to reduce comprehensive financing costs over the next five years through bank loans and corporate bonds [22] Dividend and Incentive Plans - Dividend Policy: New dividend plan expected in the second half of 2025, aiming for a high payout ratio over the next 3-5 years [24] - Incentive Plan: New incentive plan to align management and economic interests, with implementation expected soon [25] Regulatory and Market Considerations - Highway Management Regulations: No confirmed timeline for new regulations affecting the toll road sector [23] - Impact of US-China Trade War: Short-term effects on exports and production, but potential for domestic demand stimulation [36] Investment Returns and Cost Management - Internal Rate of Return for Projects: Approximately 6% for reconstruction and expansion projects [37] - Cost Control: Decrease in sales expenses due to cost optimization measures [32] Conclusion Shandong Expressway is navigating challenges in toll revenue due to traffic diversions while maintaining growth in other segments. The company is focused on strategic investments and cost management to enhance profitability and shareholder returns in the coming years.