Guangdong Expressway A (000429): The main business of the road industry has a stable income and a high dividend investment business.

Guangdong Expressway A (000429): The main business of the road industry has a stable income and a high dividend investment business.
Key points of investment: The high-speed segment has stable performance and good cash flow.Road 西安耍耍网 transportation is the most efficient and convenient transportation method between regions. The number of highway passenger and freight transportation in the comprehensive transportation system is 78.8% and 78.04%.Relying on the increase in vehicle ownership and the increase in short-distance travel frequency, highway traffic has steadily increased. In 2017, the passenger traffic on highways was 75.900 million vehicles, an increase of 15 in ten years.2%, the average freight density reached 2271 unit km / km, an increase of 9 per year.8%.From the perspective of operating cash flow, the overall operating cash flow of the industry is good, and the overall net operating cash flow is attributed to the net profit of the mother.64 times Guangdong Expressway Holdings operates three roads, which is located in Guangdong’s steady revenue growth.Guangdong 西安耍耍网 Expressway is a high-speed listing platform affiliated to Guangdong Communications Group. The actual controller is the State-owned Assets Supervision and Administration Commission of Guangdong Province. It mainly controls Guangfo Expressway, Fokai Expressway and Guangzhu Section of Beijing-Zhuhai Expressway, and holds 158 expressway mileage.12 kilometers, the average remaining charge period is 10 years.The three holding roads mainly increased to Guangdong Province, benefiting from Guangdong’s economic growth, the growth of vehicle traffic on holding roads has been relatively stable, and the three holdings have a high growth of 2015-2018H1 total vehicle traffic compound growth7.29%, bringing a steady increase in toll revenue, which increased by 6 in the first half of 2018H1.5%. Equity mileage of 7 road assets in 273 kilometers, contributing to stable investment income.The 7 road shares in which the company shares are mainly distributed in Guangdong Province. The company’s average shareholding ratio is 30%, and the total mileage of expressway shares in the company is 684.20 kilometers, with a total mileage of 273 in proportion to equity.05 kilometers.The high-speed participation in stocks maintained relatively high growth while contributing relatively stable investment income to the company. In 2017, investment income accounted for about 24% of total profits. Dating in many ways, investment and diversified development of investment business.The company completed major asset reorganization in 2016, successfully dated Yadong Fosun Yalian, Poly Real Estate (Tibet Yingyue), and Guangfa Securities, etc., and planned to reorganize “main highway + resource development along the line, smart transportation, finance and similar”The “1 + 4” industrial development pattern of finance, investment (energy conservation, environmental protection, big health, etc.) and corresponding planning goals have promoted diversified business development. Covered for the first time, giving “overweight” rating.We estimate the company’s net profit attributable to its parent to be 16 in 2018-2020.7.7 billion, 15.6.6 billion, 16.8.7 billion, corresponding to the current PE of 10.87 times, 11.64 times, 10.81 times, which is relatively low compared to industry estimates. At the same time, according to the company’s cash dividend commitment, the dividend yield in 18/19 can reach 6.44%, 6.01%, with defensive configuration value, covering for the first time, given an “overweight” rating. Risk reminder: The traffic flow caused by the rapid economic growth is reduced; the change of charging policies is not conducive to the company’s development.