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China Pass (688009): Double-track champion of rail signal system returns to A-shares for a new look

China Pass (688009): Double-track champion of rail signal system returns to A-shares for a new look

Highlights of the report China General: The world’s leading supplier of rail transit control system solutions is the world’s leading provider of rail transit control system solutions, covering the entire industrial chain of rail transit control systems.

Revenue in 2018 was US $ 40 billion, a compound growth rate of 6% in the past three years; net profit attributable to mothers was US $ 3.4 billion, a compound growth rate of 6% in the past three years.

The decline in gross profit margin in 2018 was mainly due to the slow growth of high gross profit margin railway business revenue compared to urban rail, which is expected to pick up in the future.

In 2018, there was a large increase in the scale of orders and a change in structure. The railway business benefited from the rapid implementation of high-speed rail projects, and the scale of new orders for general contracting projects was controlled.

  Facing the core equipment of safety, benefiting from rail transit construction and updating the signal system is one of the most critical core technologies of rail transit. It has two characteristics: mid-to-post cycle attributes and regular upgrades.

In 2019, the planned mileage of high-speed railways is 3,200 kilometers, and the actual implementation is beyond the plan, and it is expected that the newly-opened mileage in 2019-2020 will exceed 4,100 kilometers per year.

The domestic urban rail line network density is still significantly low. It is expected that the average traffic volume in the next three years will be 1,300 kilometers per year, which will increase before 2016-2018.

In addition, the company implemented the current project of the Beijing-Tianjin Intercity Railway train control system, which is the only project in the current high-speed rail update market last year, and achieved leading market share and unique project experience advantages. The market is expected to open in the next few years.

  The growth of the next two years is high, and the fund-raising project will start a new growth space. The company is the double champion of domestic high-speed rail and urban rail signal systems, and the competition pattern is stable at the same time.

The new chronic single signal system generally leads revenue 1-1.

Five years, the company’s rapid growth in the next two years is highly certain.

The investment funds raised this time are mainly used for advanced and intelligent technology research and development projects and manufacturing bases, replacing the company’s restructuring of electrics, and the accumulation of control technology is committed to promoting the application of new technologies such as intelligent operation and maintenance, and chips, opening up new growth opportunities for the company.

  Estimation analysis and investment recommendations estimate that the net profit for 2019-2021 will be 40.




With reference to China Tonghao (H) and similar 四川耍耍网 evaluations of A-share companies, it is estimated that the company’s reasonable PE is estimated to be 14-17 times, corresponding to a market value of 569-690 trillion after issuance, according to 105 after issuance.

Calculated at 900 million shares, the corresponding stock price range is 5.

37 yuan-6.

52 yuan.

  Risk Warning: 1.

The risks of macroeconomic and industry policy changes, the risks of product or service quality, the risk of loss of technical staff, and the risk of seasonal fluctuations in income; 2.

BT, BOT and other projects’ policies, income and cash back, project exit and other risks, changes in income structure and profit risks.