Daqin Railway(601006) 信达证券·2024-09-25 08:03Investment Rating - The report assigns an "Accumulate" rating to the company [2]. Core Views - The company, Daqin Railway, is a leading platform for coal transportation under the China National Railway Group, showcasing stable operations and significant cash value [2][11]. - The core asset, the Daqin Line, is the first heavy-load railway in China, covering 658 kilometers and accounting for 14.5% of the national coal freight volume in 2022 [11][19]. - The company has maintained a high dividend payout ratio, with a commitment to distribute at least 55% of its net profit as cash dividends annually from 2023 to 2025 [11][25]. Summary by Sections 1. Company Overview - Daqin Railway was established in 2004 and listed on the A-share market in 2006, with a high ownership concentration, as the controlling shareholder, Taiyuan Bureau Group, holds 52.9% of the shares as of the end of H1 2024 [2][12]. - The company's main business is freight transportation, which contributes approximately 70%-80% of its revenue, while passenger transport accounts for 5%-15% [2][14]. 2. Financial Performance - The company has achieved a net profit exceeding 10 billion yuan since 2017, with a net profit of 11.93 billion yuan in 2023, reflecting a year-on-year growth of 6.6% [2][23]. - The cash flow is robust, with a cash coverage ratio of 1.27 times in 2023, indicating strong financial health [23][24]. 3. Dividend Policy - In 2023, the company distributed cash dividends of 6.929 billion yuan, with a payout ratio of 58.1% [25]. - The company has a commitment to maintain a cash dividend ratio of no less than 55% of the annual net profit, with a history of maintaining a dividend payout ratio above 50% since 2019 [25][11]. 4. Operational Capacity - The Daqin Line has a designed annual capacity of 400 million tons, with the actual freight volume reaching 422 million tons in 2023, indicating sufficient capacity [27][31]. - The company is exploring further capacity enhancements through optimizing train intervals, increasing train lengths, and improving load weights [27][28][30]. 5. Market Outlook - The report anticipates a recovery in freight volume in the short term, supported by policies aimed at stabilizing coal production in Shanxi province [33]. - The company benefits from a "three-layer safety cushion" that supports long-term freight volume growth, including the concentration of coal sources, structural reforms in bulk commodity transportation, and the competitive advantages of its main transportation lines [11][33].