SRBC(600039) Tianfeng Securities·2024-07-25 07:02Investment Rating - The report maintains a "Buy" rating for Sichuan Road and Bridge (600039) with a target price reflecting a potential upside of over 20% relative to the Shanghai Composite Index over the next six months [5][11]. Core Views - The company's business model is continuously optimized, focusing on low valuation and high dividend investment value. The integrated investment and construction model is expected to enhance profitability and expand order scale and market share [1][3]. - The company is actively participating in large-scale infrastructure projects in Sichuan, with significant contributions to the revenue and profit of the Shudao Group, which is crucial for the group's expansion [1]. - The clean energy sector is a growing focus, with the establishment of joint ventures aimed at developing power projects, indicating a strategic shift towards higher-margin businesses [2][3]. Financial Summary - The projected net profit for the parent company for 2024-2026 is estimated at 95 billion, 106 billion, and 118 billion respectively, with corresponding P/E ratios of 6.0, 5.4, and 4.8, indicating that the current valuation primarily reflects the engineering business [3][4]. - The company has a cash dividend policy of at least 50% for the years 2022-2024, with an estimated dividend yield of 8.33% based on the projected net profit for 2024 [3][5]. - Revenue for 2023 is projected at 115,041.51 million, with a growth rate of -14.88%, followed by a recovery in 2024 with an expected revenue of 127,677.38 million, reflecting a growth rate of 10.98% [4][7]. Business Model and Market Position - Sichuan Road and Bridge's integrated model allows it to secure substantial construction orders, with recent bids for projects totaling approximately 994 billion, which represents 86% of the company's revenue for 2023 [1][3]. - The company is positioned to benefit from the ongoing infrastructure investment in Sichuan, which is expected to provide a solid foundation for revenue growth [1][2]. Clean Energy Initiatives - The company is expanding its footprint in the clean energy sector, with a total installed capacity of approximately 5.4 GW in clean energy projects, which is expected to contribute significantly to future profits [2][3].