2025-11-07 01:28Summary of Jiangsu Expressway - H/A Conference Call Company Overview - Company: Jiangsu Expressway - Ticker: 177 HK (H shares), 600377 CH (A shares) - Market Cap: $6.133 billion (H shares), $9.658 billion (A shares) [4][27] Key Industry Insights - Sector: Infrastructure, Industrials & Transport - Performance: Jiangsu Expressway has shown solid operational performance and cost efficiencies in 3Q25, supporting a positive outlook [2][12] - Market Context: H shares have declined by 5% and A shares by 15% since June, while the CSI300 index gained 11%, attributed to fund rotation into growth names [2] Financial Performance - 3Q25 Results: - Revenue growth of 6.6% year-over-year (Y/Y) for Shanghai-Nanjing Expressway, driven by a 12% increase in truck traffic [6] - Cost of revenue decreased by 5.6% Y/Y, with expectations for continued decline in road maintenance costs [6] - Earnings Estimates: - 4Q25 earnings expected to rise by 15% Y/Y due to resilient toll revenue and cost-reduction efforts [6] Dividend and Valuation - Dividend Yield: 5.7% for Jiangsu Expressway - H, with a commitment to maintain dividend stability [2][12] - Price Target: - H shares: HK$11.00 by Dec-26 [4][17] - A shares: Rmb15.00 by Dec-26 [27][41] - Valuation Metrics: - Adjusted EPS for FY25E: Rmb0.95, FY26E: Rmb1.01 [9][27] Strategic Initiatives - Expansion Projects: - Ongoing preparations for the Shanghai-Nanjing Expressway expansion, with completion aimed before the concession expires in 2032 [8] - Several major projects are progressing as scheduled, including the Ningyang Yangtze River Bridge North Connection and Xitai Project [7][8] - Regulatory Environment: - Anticipated revisions to the National Tollroad Regulation Policy, potentially extending concession periods and promoting balanced tolling [6] Risks and Considerations - Downside Risks: - Larger-than-expected decline in traffic, higher-than-expected capital expenditures for new projects, and less favorable toll-road industry policy terms [23][42] - Upside Risks: - Larger-than-expected increase in traffic and lower-than-expected capital expenditures [42] Conclusion - Investment Stance: Overweight on Jiangsu Expressway - H due to solid fundamentals, attractive yield, and growth potential in the toll-road sector [2][12][21] - Neutral on Jiangsu Expressway - A due to valuation concerns after recent price rallies [30][40]