Sichuan Road and Bridge (600039) First Coverage Report: Benefits of Chengdu-Chongqing Integration Results Elastic PB Breaks Nets to Be Repaired
This report reads: The company deeply cultivates the Chengdu-Chongqing market and continues to benefit from the infrastructure interconnection and interoperability exchange brought about by the integration of Chengdu-Chongqing urban agglomerations. The merged company helps the controlling shareholders to enter the world’s top 500 targets, increasing performance and increasing motivation and certainty.
Investment Highlights: Coverage for the first time, give overweight rating.
The company deeply cultivated the Chengdu-Chongqing region and benefited from the integration of Chengdu-Chongqing urban agglomerations, with some room for growth.
The EPS for 2019-2021 is predicted to be 0.
54 yuan, a growth rate of 30/17/11%.
With reference to a comparable company’s assessment, considering the flexibility advantage of infrastructure construction in the Chengdu-Chongqing region, an appropriate premium should be given to the company in October 2019.
0 times PE, target price 4.
2 yuan, the first coverage given an overweight rating.
Affected by the high base number, the single period of newly added H1 in 2019 is prolonged, but the company’s deep cultivation of the Chengdu-Chongqing market will continue to benefit from the opportunity of Chengdu-Chongqing urban agglomeration’s integrated infrastructure to make up for shortcomings.
1) According to the statistics of the announcement, the company will gradually expand its bid for 141 in 2019H1.
$ 900 million / 67% decrease in the same period (106% growth in the same period in 2018) or mainly due to the high base in the same period in 2018 and quarterly conversion; 2) The company deeply cultivated the Chengdu-Chongqing region and led the market 淡水桑拿网 share.Advantages such as population size / industrial agglomeration support future infrastructure investment to maintain value-added growth, and the company will continue to benefit; 2) On August 16, the Development and Reform Commission stated that it would study and propose to accelerate the development of integrated development policies for Chengdu-Chongqing urban agglomerations, and infrastructure under the trend of regional integrationInteroperability Interoperability will accelerate.
Helping controlling shareholders to enter the world’s top 500 targets to support the company’s performance momentum, PB broke the net to be repaired.
1) The company fully supports the controlling shareholders to advance to the world top 500 target, and aims to achieve revenue of 450 billion / + 12 in 2019.
4%; 2) The controlling shareholder owns rich assets such as highways, hydropower, etc. The company is the only listing platform for the controlling shareholders, and there is room for future business collaboration and integration; 3) As of June 20, 2019, the controlling shareholders increased their total holdings by 3,211.
120,000 shares (0% of total shares).
89% / average price 3.
31 yuan / total amount 1.
06 million yuan), showing confidence, while the existing company PB (LF) is only 0.
85 times the lowest position; 4) In August 2019, the company applied to the CSRC to resume review of the issue of the company’s convertible bonds ($ 2.5 billion). If the issue is successful, it will help increase and optimize the financial structure, reduce financial costs, and improve profitability.
Catalysts: Infrastructure investment continued to pick up, single-speed growth in the new decade, and new business profits accelerated.
Risk warning: Fiscal and monetary policies increase sharply, new long-term single reorganization, new business deteriorates sharply, etc.