Ninghu Expressway (600377) Quarterly Report Comment: Performance Exceeds Expectation, Higher Toll Revenue Growth

In the first quarter of 19, revenue decreased by 16 year-on-year.

31%, with a 10-year increase in earnings.

70%, higher-than-expected performance Ninghu Express released the first quarter report for 2019: 1) Revenue decreased by 16.

31% to 23.

6.2 billion, net profit attributable to mothers increased by 1.

70% to 10.

34 ppm; 2) Performance exceeded expectations (our earnings forecast is 9.

4.6 billion).

Earnings growth in the first quarter of 19th mainly came from a low base of performance and an endogenous increase in traffic flow.

The better-than-expected results were mainly due to the higher-than-expected traffic volume.

We expect the EPS for 2019-2021 to be zero.



97 yuan, adjust the target price to 10.


00 yuan,南京桑拿网 maintaining the “overweight” level.

The main business of toll roads grew steadily. Due to the interruption of land business in the settlement cycle in the first quarter of 19, the company’s revenue decreased by 16.

31%, mainly dragged down by the decline in real estate income.

Benefiting from the endogenous growth of traffic flow and a low base, the company’s toll revenue growth rate is higher.

In the first quarter of 19, toll revenue increased by 8 per year.

07%, accounting for 79% of total revenue. Shanghai-Nanjing Expressway revenue at core sections increased by 5.


The base error in the first quarter was affected by severe snow and ice weather, and total toll revenue in the first quarter of 2018 only increased by 2.

66%, of which the Shanghai-Nanjing section increased by 1.


Land business income is reduced by 74 per year.

44%, accounting for 8% of total revenue, mainly due to the high base caused by the settlement cycle. The Suzhou South Gate project was delivered in 1Q18, but there were no new delivery projects in 1Q19.

Ancillary business income is reduced by 12 per year.

74%, accounting for 13% of the total revenue. Due to the implementation of double-deck oil tank renovation in service areas in accordance with environmental protection requirements, oil product sales revenue was replaced.


Due to the increase in traffic flow and the maximum increase in investment income, in the first quarter of 19, the increase in gross profit after deducting taxes and surcharges decreased by 51.78 million yuan, and operating profit increased slightly by 8.43 million yuan.

The difference between the two is mainly because for every 568 million reduction in financial expenses, investment income increases by 5992 million.

In our judgment, the increase in investment income mainly comes from the increase in vehicle traffic of associates.

In the first quarter of 19th, the toll revenue of the Jiangsu-Jiangsu Bridge on which the company had shares increased by 14 per year.

59%, 18.


Due to the construction of new expressways, companies with heavy capital expenditures from 2019 to 2020 are constructing 3 new expressway projects with a total investment of approximately 19.8 billion US dollars.

As of the end of 2018, the progress of the Wufeng Mountain, Changyi and Yichang projects was 53.68%, 54.

14%, 35.


Due to the competitiveness of the total investment scale, we expect: 1) cash flow: the capital expenditure in 2019-2020 is still high, and the company’s short-term cash flow will be disrupted; 2) the profit side: due to the capitalization of financial expenses,The impact is small; 3) Time point: Due to the best prospects and the largest investment in the Wufeng Mountain project will be opened to traffic in 2020, we expect that the time when the new road property will make outstanding contributions will be 2021 or later.

Adjust target price to 10.


00 yuan, maintain the “overweight” rating because the first quarter traffic is higher than expected, we adjust the 2019/20/21 return to mother net profit forecast to 41.



6.8 billion (previously 40.



1.8 billion).

We expect the company’s two dividends to grow steadily in 2019/20/21, respectively, to 0.

48, 0.

50, 0.

52 yuan, corresponding to a dividend yield of 4.

84% / 5.

04% / 5.

twenty four%.

We adjust our target price to 10.


00 yuan (previous 10).


70 yuan), based on: 1) still based on 13.

3x 2019PE (Industry estimates the hub is 11.

30x 2019PE, given a premium due to high valuation), with a target price of 10.

90 yuan; 2) DCF: based on WACC = 7.

86% (previous 7).

66%) Estimated target price 11.

00 yuan.

Maintain the “overweight” rating.

Risk warning: the economic scale of the Yangtze River Delta, the traffic growth rate exceeds expectations, and real estate sales are lower than expected