Investment Rating - The report initiates coverage with a "Buy" rating for the company [2][9]. Core Insights - The company benefits from the economic prosperity of Zhejiang Province, which supports long-term growth in traffic volume. The recent introduction of the new toll road management regulations is expected to enhance the asset duration for highway operating companies [5][37]. - The company has a strong position in the market with a significant number of toll road assets and a long remaining concession period, which is expected to drive revenue growth [8][45]. - Traffic volume growth is anticipated to drive high performance, with the company maintaining industry-leading profitability metrics [8][51]. Summary by Sections 1. Economic Environment and Regulatory Framework - Zhejiang Province ranks fifth in per capita GDP in China, with a high density of highways, supporting traffic volume growth. The number of private vehicles has grown at a CAGR of 8.5% from 2015 to 2023 [5][30]. - The new toll road management regulations are expected to extend the concession periods for highway operations, positively impacting asset duration [5][37]. 2. Company Position and Asset Quality - The company, established in 1996, focuses on toll road concessions primarily in Zhejiang Province, with a total asset scale of approximately 217.2 billion [8][42]. - The company controls 11 toll roads with a total operating mileage of 1,143 kilometers, benefiting from a long average remaining concession period of 6.17 years [8][45]. 3. Traffic Volume and Revenue Growth - The company’s revenue is primarily driven by toll road operations, with a projected revenue growth of 13.87% in 2023, followed by steady growth in subsequent years [6][51]. - Traffic volume is expected to increase due to regional economic recovery and ongoing acquisitions, with a significant contribution from the Shanghai-Hangzhou-Ningbo Expressway [8][63]. 4. Financial Projections and Valuation - The company’s projected net profits for 2025 to 2027 are estimated at 56.71 billion, 58.87 billion, and 61.49 billion respectively, with corresponding PE ratios of 7x, 6x, and 6x [6][9]. - The average PE valuation of comparable companies is 9x, indicating that the company is undervalued relative to its peers [9].
浙江沪杭甬（00576）：区域经济赋能车流量长期增长，改扩建重塑资产久期