Jiayou International (603871): Foreign Investment Project Launches African “Port + Logistics” Model

Company dynamics keep outperforming the industry Company status on August 13 The company issued an announcement that it plans to invest in the reconstruction of the state-owned (gold) Kason Balesa-Sacania road and dry port. The project includes 150 kilometers of roads and 4 tollsStation, a Sakaniya border port, a Sakaniya dry port, a MOKAMBO border port, 2 modern parking lots and a living area for financing, design, construction, layout planning, etc.

The estimated total investment of the project is 2.

$ 300 million with a concession term of 25 years.

Before returning the total investment and index of the project completely, Jiayou International achieved a net profit of 90%, and after full return, Jiayou obtained a net profit of 80%.

  The company issued a performance forecast on July 21, and expected 1H19 profit growth of 25% -35%, corresponding to 2Q19 profit growth of 27% -42%, higher than 杭州夜网论坛 the consensus consensus of 20%, and our expected 25%, Slightly more than expected.

From July 21 to the close of August 13, the company continued to grow by 15%, during which the Shanghai and Shenzhen 300 fell by 3%, outperforming the broader market by 18ppt.

  Comment on the “Port + Logistics” model in Africa to accelerate the landing, which is good for the company’s long-term business growth: We estimate that the project may be completed within 2-3 years, and the completion of the project will accelerate the long-term growth of African business.

In the Colombia (Gold) region, Zijin Mining, Huayou Cobalt, China Metallurgical, China Nonferrous Metals, Luoyang Molybdenum and other Chinese-funded enterprises have set up mines. In the future, they may establish joint ventures with Jiayou to carry out this foreign infrastructure 北京夜网 investment project.

  The company’s total cash and low debt: As of the first quarter of 19, Jiayou had about 600 million in cash, 500 million in wealth management products, 200 million in receivables, and no bank borrowings.

Considering that Chinese-funded mining companies or equity joint ventures may have large bank loans at the same time, the company’s liquidity risk is relatively controllable.

  Regarding specific funding sources and project feasibility, it is recommended to pay attention to the company’s further disclosure.

  Jiayou International’s growth stage has been completed, and we believe that it will grow rapidly after a period of time: 1) Historically, the growth rate of net profit has been above 30% since 2014-18, and from the perspective of quarterly growth rateIt is expected to increase only slightly in 4Q17; 2) Looking forward, we believe that the coal supply chain will continue to contribute high growth in 2-3 years; the company expects that copper concentrate production capacity and transportation volume will double in 3-5 years; 5-Ten years later, we believe that Africa and Central Asia are likely to replicate China-Mongolia’s “port resources + general logistics contract” model.

  It is estimated that we will release the report on May 26 to cover Jiayou International for the first time, and we maintain our 2019/20 profit forecast.

The current lead is 34.

29 yuan, corresponding to 16 in 19/20.

4/13.

7x P / E, still in the predetermined position.

Outperform the industry rating thoroughly.

Maintain target price unchanged at 37.

6 yuan (corresponding to 10% growth space), corresponding to 19/20 18.

0/15.

0 times P / E.

  Risks Deteriorating Sino-Mongolian relations, turbulent political situation in Africa, new ports to divert and store their capitals.