Daqin Railway (601006): Performance basically in line with expectations 4Q Concerned about the distribution and post-consolidation performance of Haoji Railway
The 1-3 quarter results are in line with our expectations of the company’s 3 quarter 19 results and operating income of 196.
0.6 billion, the previous interest rate was 3%; net profit attributable to the mother was 40.
4.8 billion US dollars, basically flat for a year, corresponding to zero annual profit.
1-3Q revenue grows by 3% each year, and every 3% increase in net profit 杭州夜网 attributable to mothers is basically in line with our forecasts.
The core asset Daqin Line capacity crane.
1-3Q Daqin line traffic 3.
200 million tons, at least -4.
7%, worse than +5 in the same period last year.
4%; 3Q Daqin line traffic volume 1.
0.5 billion tons, at least -7.
8%, worse than +1 in the same period last year.
The decline in 3Q traffic volume was greater than 1H, mainly due to ① the continued downturn of the economic environment, ② the effects of typhoons and rain in August, and ③ the transportation capacity reduction in September during the wrong maintenance period.
In addition, 3Q investment income (mainly contributed by Shuohuang Railway) 7.
$ 8.2 billion, an average of 3% a year, relatively stable.
Glucose concentration dropped by 15%, contributing 1.
3ppm profit increase 杭州夜网论坛 (corresponding to 3% net profit).
Development trend Haoji Railway has little impact on the company’s profit potential in the initial stage.
The company currently owns a 10% stake in Haoji Railway.
In terms of operation, due to the small overlapping of the cargo source area and radiation area of the Haoji-Jilin Railway and the Daqin intersection, it is expected to be incomplete in the early stage. We expect that the diversion of the Daqin Line will be small, and the long-term impact still needs to be observed; financially, we assume this yearConsolidated at the end of October, it is expected that the Haoji Railway will affect the company’s net profit rate in 2019/20 by about 50 million yuan / 2.
300 million US dollars, respectively accounting for 0.
4% / 1.
We expect the average of 4Q and expected profit to be 4% per year.
The company’s coal freight was affected by the overall external environment, and the growth rate of railway freight volume across the country in 3Q (especially in September) was inclined.
There has been a trend of replenishment of plants in the past October.
Looking forward, carbon dioxide reaching 4Q is the peak season for coal demand, and this year ‘s maintenance ahead of schedule is good for the continuous growth of October traffic. However, with the diversion caused by the price reduction of the Haoji Railway and some surrounding lines, we combined coal transportation stability in the fourth quarter of 2016-2018At 1.
100 million tons, 4Q shipments are expected1.
100 million tons, corresponding to level 4.
300 million tons of freight.
Earnings forecasts and estimates maintain the company’s 2019/20 earnings forecasts.
1.1 billion (-4.
3%) / 143.
5.8 billion yuan (+3.
2% YoY), corresponding to the 2019/20 traffic assumption 4 of the Daqin line.
300 million tons / 4.
400 million tons.Currently, it corresponds to 2019/20.
1x / 7.
9x P / E ratio and 6.
1% / 6.
3% dividend yield.
Based on the company’s defensive value alone, we maintain an outperform industry rating and target price of RMB9.
31 yuan, corresponding to 9 in 2019/20.
9 times / 9.
7 times price-earnings ratio, 22% upside risk compared with current macroeconomic growth is less than expected, other railway lines diverge.