Yuexiu Transport Infrastructure (1052) H2 2024 earnings summary

Executive summary

• Revenue for 2024 was RMB 3.867B, down 2.5% year-over-year; profit attributable to shareholders was RMB 657M, down 14.2%.

• Asset portfolio optimized by selling Jinxiong Expressway and acquiring Pinglin Expressway, enhancing growth potential and cost control.

• Declines were mainly due to severe weather, increased toll-free holidays, and traffic diversion; Northern Ring Road toll right expired in March 2024.

• Maintained investment-grade ratings from Moody's (Baa2) and Fitch (BBB).

• Construction of GNSR Expressway R&E project commenced, progressing as planned.

Financial highlights

• Revenue: RMB 3.867B (-2.5% YoY); profit attributable to shareholders: RMB 657M (-14.2% YoY); EBITDA: RMB 3.263B (-7.3% YoY); gross profit: RMB 1.843B (-14.2% YoY).

• Earnings per share dropped to RMB 0.3925; total dividend per share was HKD 0.25, payout ratio 58.5%.

• Total assets: RMB 37.51B (+2.8% YoY); total equity: RMB 15.41B (+3.7% YoY); cash and cash equivalents: RMB 1.98B (-16.9% YoY).

• Finance costs: RMB 481M (-14.4% YoY); effective interest rate on external debt: 2.72%.

• Gross margin: 47.7% (down 6.4pp YoY); cost ratio: 52.3% (up 6.4pp YoY).

Outlook and guidance

• China's economy grew 5.0% in 2024; IMF forecasts 4.6% growth for 2025, supporting sector stability.

• Vehicle ownership rose 5.1% to 353 million, with NEVs up 53.8%, boosting toll road prospects.

• Management remains optimistic, focusing on expressway investment, M&A, and leveraging REITs and incubation platforms.

• Strategic focus on Greater Bay Area, Central and Eastern China, and expansion into new urbanization and industrialization regions.