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Guangdong Expressway A (000429): Multiple factors affect Q3 performance decline and absolute investment returns

Guangdong Expressway A (000429): Multiple factors affect Q3 performance decline and absolute investment returns
Event Overview: On the evening of October 30, 2019, the company released three quarterly reports. From January to September 2019, the company achieved revenue of 22.8 ‰, at least -4.45%, net profit attributable to mother 11.10,000 yuan, at least -9.23%, net profit after deduction is 1.1 billion, for many years -7.0%. Due to multiple factors, Q3 performance declined.According to the third quarter report, the company’s operating income in the third quarter of 2019 was 800 million, and thereafter -6.3%, the three holding roads are affected by changes in the surrounding road network, and the growth performance is differentiated: Fokai Expressway is affected by the divergence of the main line of Foshan First Ring Road, Yunzhan Expressway, and Goun Expressway, and the toll income has decreased too much;The Zhudan section was affected by Humen Bridge from August 2019 to implement restrictions on trucks and buses with more than 40 seats, Nansha Bridge to open, and the first phase of the Fan-Guan Expressway to divert vehicles. The toll revenue decreased too much; Guangfo Expressway was affected by Foshan.The closed reconstruction of some sections of the first ring road resulted in an increase in traffic volume and a slight increase in toll revenue.In the third quarter of 2019, the company’s main business gross margin was 61%, which was 66 compared with the same period last year.7% gross margin fell by 5.7pct, we judge one of the reasons for the decline in toll rates caused by the increase in the popularity of ETC and preferential discounts or the decline in the company’s gross profit margin.In terms of expenses, the company’s three fees totaled zero in the third quarter.0.94 million yuan, ten years +7.2%, of which management costs are 0.4 trillion, +25 a year.7%.Net profit attributable to the parent in the third quarter of 20193.710,000 yuan, at least -15.88%, net profit after deduction is 3.720,000 yuan, at least -12.8%. The location advantage of the holding road favors long-term development, and the high index still has investment value.We believe that the short-term factors will disappear after the impact of factors. In the long term, the company’s controlling road assets will still benefit from the economic vitality and net inflow of the population in the Pearl River Delta region. The traffic flow and toll income are expected to resume steady growth.The company’s high-dividend policy of persistence and persistence in returning shareholders makes the company still have a good absolute investment value. Investment suggestion: Keep the company’s EPS for 2019-21 to be 0.66/0.68/0.The profit forecast of 73 yuan, according to the 70% dividend rate and October 30, 20197.At the closing price of 91 yuan / share, the company’s dividend yield is expected to be 5 in 2019-21.8% / 6.0% / 6.5%.Maintain 8.The target price of 7 yuan / share 佛山桑拿网 maintains the “overweight” rating. Risk Warning: Changes in Fee Policies, Macroeconomic Downturn