下载格隆汇APP
下载诊股宝App
下载汇路演APP
社区
会员
机构：中金公司
研究员：Wenjie ZHANG/Qibin FENG/Xin YANG
Beijing-Shanghai High Speed Railway (BJ-SH HSR) announced its 2023 and 1Q24 results. In 2023, revenue rose 110.4% YoY to Rmb40.68bn, and attributable net profit turned around YoY to Rmb11.55bn, in line with our and market expectations.
In 1Q24, revenue rose 13.1% YoY to Rmb10.11bn (+26.2% from 1Q19), and net profit attributable to shareholders grew 33.1% YoY (+25.2% from 1Q19) to Rmb2.96bn, beating our and market expectations, which we attribute to: 1) better-than-expected network business; and 2) sharp loss reduction at Jingfu Anhui.
Trends to watch
Network business a bright spot. Railway network business: In 2023, the turnover of railway network business reached about 92.04mn train- kilometer, up 66.2% YoY, vs. 16.5% YoY in 2019; revenue from the railway network business grew 74.6% YoY to Rmb24.22bn in 2023. We think the rapid YoY growth of cross-line train operations may continue in 2024.
Passenger transport business: In 2023, trains on the BJ-SH HSR provided services to 53.25mn passengers, up 209.1% YoY, largely flat with that in 2019. The firm’s revenue from passenger transport in 2023 stood at about Rmb16.08bn, up 215.6% YoY and 2.8% YoY from 2019.
Jingfu Anhui sharply reduced losses in 1Q24, nearly reaching the breakeven point. Jingfu Anhui incurred a loss of about Rmb966mn in 2023, contributing a loss of Rmb628mn to the firm. Based on minority interest in 1Q24, we estimate that Jingfu Anhui recorded a loss of around Rmb46mn in 1Q24, down about Rmb200mn YoY, close to the breakeven point.
Cash flow improved significantly; falling interest-bearing liabilities drove down financial costs. Operating cash flow reached Rmb21.08bn in 2023, a significant YoY improvement and a record high. In addition, the firm’s net debt repayment was about Rmb9.13bn in 2023. The firm’s interest expenses fell 16.4% YoY in 2023 and 19.5% YoY in 1Q24. The firm’s liability-to-asset ratio was 24.7% in 1Q24, down 3.4ppt from 1Q23.
Financials and valuation
Considering better-than-expected network business, Jingfu Anhui’s performance and significant improvement in cash flow, we raise our 2024 earnings forecast 9.1% to Rmb14.3bn (up 23.9% YoY) and introduce 2025 earnings forecast of Rmb16.27bn (up 13.8% YoY). The stock is trading at 17.6x and 15.4x 2024e and 2025e P/E. We maintain an OUTPERFORM rating and our target price of Rmb6.14/sh, implying 21.1x and 18.5x 2024e and 2025e P/E, offering 19.9% upside.
Risks
Disappointing travel due to complicated weather conditions; disappointing railway network business of Jingfu Anhui.