1H21 revenue + 5.6% year-on-year, home net profit + 11.8% year-on-year, high base overlay industry economic adjustment led to a slowdown in performance growth. The gross profit margin rose slightly and the cost was well controlled as a whole. There has been a steady increase in newly signed orders, sufficient on-hand orders, and an increase in the single scale of the project. Taking into account the acceleration of the issuance of 2H21 special bonds, as well as the steady growth of new orders signed by the company, abundant funds and other factors, we maintain the net profit forecast for 2021-2023 of RMB 4.7 million, corresponding to the forecast of EPS for 2021-2023 of 1.25shock of 1.47 yuan, and the current price corresponding to 9.7x/8.2x/7.0x, and we give the target price of 13.00 yuan (corresponding to 12.3 times PE in 2021) and maintain the "buy" rating.
1H21 revenue + 5.6% year-on-year, home net profit + 11.8% year-on-year, high base overlay industry economic adjustment led to a slowdown in performance growth. The company's 1H21 revenue was 1.28 billion yuan, + 5.6% year-on-year, gross profit 400 million yuan, + 9.1% year-on-year, and net profit 280 million yuan, + 11.8% year-on-year. The profit growth rate was better than the income growth rate mainly due to the increase in gross profit margin over the same period last year, and the periodic adjustment of the high base superimposed industry led to a slowdown in performance growth. In a single quarter, 2Q21 revenue / net profit was-5.4% compared with the same period last year, and profits increased as revenue declined.
The gross profit margin has increased and the cost has been well controlled as a whole. The company's 1H21 gross profit margin was 31.3%, an increase of 1.0pcts over the same period last year.
The expense rate during 1H20 is from + 0.4pcts to 5.4% compared with the same period last year, of which the management / R & D / financial expense rate is 3.1%, 2.4% and 0.1%, and + 0.3/+0.1/0.0pct, respectively. The increase in management fee is mainly due to the reduction of travel and office expenses in the same period last year, and the reduction of social insurance fees in stages of the epidemic, and the company's overall cost control is good. The net operating cash outflow was 270 million yuan (290 million yuan in the same period last year), and the cash flow improved compared with the same period last year; the net investment cash inflow was 20 million yuan (1.87 million yuan in the same period last year), mainly due to the maturity of structured finance purchased in 2020; the net cash outflow from fund-raising was 70 million yuan (120 million yuan in the same period last year).
The newly signed orders have warmed up, the orders on hand are sufficient, and the single scale of the project has been improved. The bid winning / newly signed order of 1H21 Company is 1.26 billion yuan, which is 29.1% higher than that of the same period last year. The scale of the project has increased, and the amount of bid winning / newly signed order of project unit has increased compared with the same period last year. Considering the acceleration of the issuance of 2H21 special bonds and the follow-up of the project entering the bidding stage, we expect the order of 2H21 Company to maintain steady growth.
Continue to maintain zero interest-bearing liabilities, forestry carbon sequestration may bring new business opportunities. As of 1H21, the company has a monetary capital of 670 million yuan and continues to maintain zero interest-bearing liabilities. In addition, the company has signed cooperation agreements with the Shanghai Environmental Energy Exchange and will actively explore business opportunities such as forestry carbon sequestration, mine management and soil remediation in the future. We believe that eco-environmental protection and carbon neutralization are one of the important goals of the national strategic planning, the medium-and long-term related investment will remain relatively strong, and the company is expected to continue to benefit from industry development opportunities and expand steadily while keeping its statements healthy.
Risk factors: the deterioration of local government financial strength; forestry carbon sequestration is not as fast as expected; the longer payback cycle leads to the deterioration of cash flow; the landing progress of fixed growth is not as expected; the promotion of PPP projects is not as expected.
Investment suggestion: considering the acceleration of the issuance of 2H21 special bonds, the steady growth of new orders signed by the company, abundant funds and other factors, we maintain the 2021-2023 net profit forecast of RMB 4.7 billion, corresponding to the 2021-2023 EPS forecast of 1.06 shock 1.25 shock 1.47 yuan, the current price corresponding to 9.7x/8.2x/7.0x, and we give the target price of 13.00 yuan (corresponding to 12.3 times PE in 2021). Maintain a "buy" rating.