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Yangtze Business Daily News● Yangtze Business Daily reporter Shen Yourong

Dazhong Transportation (600611.SH) hit the daily limit again!

On July 23, Volkswagen Transportation once again hit the daily limit, achieving two consecutive daily limits.

The candlestick chart shows that Volkswagen Transportation has performed positively in the 12 trading days since July 8, with its stock price rising by about 1.43 times.

Why did the stock price of Volkswagen Transportation, which had been flat for nearly four years, suddenly rise? On July 22, Volkswagen Transportation announced that the company has noticed that the market has paid much attention to intelligent connected vehicles recently. The company also clarified that the model is still in the experimental stage and basically does not generate any income for the company.

The Dazhong Transportation Institute continues to promote flattening reforms and consolidate the development pattern of two wings and four pillars. The four pillars are the four major industry groups of transportation, automobile services, financial investment, real estate and hotels, and big data.

Affected by various factors, the company's operating performance fluctuates, but overall it still has a certain profitability. In 2023, the company's net profit attributable to shareholders of the parent company (hereinafter referred to as "net profit") exceeded 300 million yuan, an increase of more than two times year-on-year.

Dazhong Transportation has a sound financial operation. As of the end of 2023, the company's debt-to-asset ratio is 45.48%. The major shareholder is firmly optimistic about the development prospects of Dazhong Transportation. In the past nine years, the major shareholder of Dazhong Transportation has not reduced its holdings in the company.

Share prices soar due to driverless cars

Mass transportation is booming in the secondary market.

The candlestick chart shows that over the past four years, the share price of Dazhong Transportation has been hovering around 3 yuan. On February 6 this year, it even bottomed out at 2.27 yuan per share. The real take-off of Dazhong Transportation's share price began on July 8, when the company's share price rose from a low of 2.77 yuan per share, with a daily increase of 6.12% and a closing price of 2.95 yuan per share. The next day, the company's share price soared 8.81%. On July 10 and 11, Dazhong Transportation's share price rose by the daily limit for two consecutive trading days. On July 12, the company's share price rose by 8.25%, on the 15th by 5.95%, and on the 16th by the daily limit again. On July 17, Dazhong Transportation's share price made its first correction since this round of market, with a slight drop of 0.41% on the same day. On July 18, Dazhong Transportation's share price rose by the daily limit again. On July 19, the company's share price rose by 3.91%. On July 22, Volkswagen Transportation opened high and continued to rise in the morning, and was capped at the daily limit at 10:42. It remained at the daily limit at the end of the day's trading.

In the morning of July 23, Dazhong Transportation continued to open high and rise, and closed at the daily limit at 9:56. However, at about 2 o'clock in the afternoon, Dazhong Transportation was smashed by funds, but it didn't last long, and Dazhong Transportation was closed again.

So far, Dazhong Transportation has achieved six daily limit ups in 12 trading days. The company's stock price has risen from the closing price of 2.78 yuan per share on July 5 to 6.75 yuan per share, with an increase of 142.80%.

Why did the stock price of Volkswagen Transportation, which had been flat for several years, suddenly rise sharply?

From July 10 to 22, Dazhong Transportation issued a total of 6 announcements on abnormal stock trading fluctuations. In the announcement, the company stated that after self-examination, the company's current production and operation activities are normal, and the company's disclosed operating conditions and internal and external environment have not changed significantly. There are no major events that affect the abnormal fluctuations in the company's stock trading price. The controlling shareholder, actual controller and other relevant parties also confirmed that as of the date of disclosure of the announcement, except for the information that has been publicly disclosed in the designated media, there are no major events that affect the abnormal fluctuations in the company's stock trading price; there is no other major information that should be disclosed by the company but has not been disclosed, including but not limited to major asset restructuring, share issuance, acquisition, debt restructuring and other major events.

In the announcement, Volkswagen Transportation repeatedly mentioned that it has noticed the recent high attention from the market on smart connected vehicles. This model is still in the experimental stage and basically does not generate any revenue for the company. There is still uncertainty about the future business development trend and it will not have a significant impact on the company's business activities in the short term.

However, some analysts believe that the concept of driverless cars is undoubtedly the biggest winner in the A-share market recently. The performance of the two leading driverless car stocks, Volkswagen Transportation and King Long Motors, has attracted the most attention.

Profits of over 10 billion since listing, dividends of 3.4 billion

The surge in Volkswagen Transportation's stock price reflects the market's expectations for its driverless business. At the same time, the company's own operations are relatively stable.

The predecessor of Dazhong Transportation was Shanghai Dazhong Taxi Company, and it has now become one of the largest public transportation groups in Shanghai.

Dazhong Transportation was listed on the Shanghai Stock Exchange on August 7, 1992. It is a long-established listed company. After years of development and layout, its main industries are currently the transportation, automobile and service industry, financial investment industry, real estate and hotel industry, and big data industry.

Judging from the current market situation, the four major industries of the above-mentioned companies are under certain pressure, but there is also a positive trend. In the transportation and automobile service industry, the mobility problem of drivers and the price competition of mainstream online car-hailing platforms have caused a double impact on the industry's service quality and profit expectations. In the field of car rental, leasing companies are still facing a relatively severe situation of preservation and determination. In the financial investment industry, the demand for small loans has tended to shrink, and the homogeneous competition with bank products has limited the development of traditional small loan business to a certain extent, and there is also competition in the business between Internet small loan companies and financial companies. The company quickly made business adjustments and launched products with strong market competitiveness, such as stock pledge loans, to effectively hedge the risks caused by the loss of conventional business. In the real estate and hotel industry, the current situation of the real estate industry is that real estate regulation policies and financial policies have given more support in risk prevention, delivery guarantee and stable demand, and the real estate market is expected to improve. In the big data industry, with the prevalence of processing models such as ChatGPT, the demand for computing power has grown rapidly, bringing significant opportunities to the computing power market.

Dazhong Transportation said that the company continues to promote flattening reforms and consolidate the development pattern of two wings and four pillars. The two wings are reflected in the dual-engine development of industrial capital and financial capital, and the four pillars are four major industrial clusters, namely transportation and automobile services, financial investment, real estate and hotels, and big data industrial clusters. The company further leverages the advantages brought by institutional reforms, digital transformation, and industrial resource integration, focusing on the main business, synergizing and increasing efficiency, and developing steadily.

Overall, by constantly responding to market changes, Dazhong Transportation has maintained a certain level of profitability. From 2020 to 2023, the company's net profits will be 535 million yuan, 328 million yuan, -274 million yuan, and 324 million yuan, respectively.

Wind data shows that since its listing, Volkswagen Transportation has achieved a cumulative net profit of 10.785 billion yuan and distributed a total of 3.424 billion yuan in cash dividends. The average dividend rate since its listing is 31.75%, and the dividend financing ratio is 353.48%.

Dazhong Transportation's financial operations are relatively stable. As of the end of 2023, the company's debt-to-asset ratio is 45.48%.

A reporter from the Yangtze Business Daily found that since 2016, the major shareholders of Volkswagen Transportation have not reduced their holdings.

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