Revenue and profits increased in the first half of the year, equity incentives inspired employees to maintain the "buy" rating. Recently, the company released its annual report for 21 years. 21H1 achieved revenue of 1.277 billion yuan, 5.57% year-on-year, and net profit of 277 million yuan, + 11.79% compared with the same period last year. Deducting non-return net profit from the same period of last year, 21Q2 achieved revenue of 753 million yuan in a single quarter,-5.43% year-on-year, and net profit of 178 million yuan. Year-on-year + 5.10%. The company's main business income increased over the same period last year, mainly due to the company's acceleration of the implementation of stock projects and new bid-winning projects, resulting in an increase in revenue and profits. In the first phase of the company's 21-year employee stock ownership plan, the unlocking conditions are based on 20 years, and the return net profit in 21-23 years increases by 20%, 38% and 58.7% respectively. We believe that the employee stock ownership plan is expected to further stimulate employee motivation. The follow-up of the company's business is also expected to benefit from carbon neutralization and ecological and environmental protection-related policies to maintain the "buy" rating.
Higher gross profit margin and good overall control of expenses
21H1 has a gross profit margin of 31.28%, a year-on-year increase of 1.02pct, a management / R & D / financial expense rate of 3.09%, a trend of 2.41% and a change of 0.14%, and a year-on-year change of + 0.29/+0.07/+0.01pct. The increase in management fees is mainly due to the impact of the epidemic in the same period of 20 years, the reduction of office expenses / travel expenses and phased social insurance fee reduction, resulting in lower management fees for 20 years. The increase in R & D cost is due to the company's increased R & D investment in other sub-areas of ecological restoration.
The income-to-cash ratio has increased significantly, and the quality of revenue is expected to continue to improve.
From the perspective of cash-to-cash ratio, 21H1's cash-to-cash ratio is 34%, year-on-year + 17.1pct, mainly due to various measures taken during the reporting period to increase the recovery of project funds; cash-to-cash ratio of 67%, year-on-year + 27.3 pct; cash flow perspective, CFO net-273 million yuan, the reduction of operating receivables is 17 million yuan. An increase of 291 million yuan over the same period last year, and the increase of operating items payable was 311 million yuan, a decrease of 295 million yuan over the same period last year; from the balance sheet point of view, the debt ratio of 21H1 was 56.1%, an increase of 3.12pct over the same period last year. The total asset turnover of 21H1 was 0.17 times, which was 0.02 times lower than that of the same period last year. Through the above three angles, we think that through better upstream and downstream receipt and payment management, the company makes the cash relatively match, and the company has no interest-bearing liabilities, but the increase of accounts payable makes the debt ratio of the company gradually increase. We believe that with the further improvement of the industry environment and the gradual entry into the collection period of the company's EPC business, the company's revenue quality is expected to continue to improve.
It is expected to benefit from the carbon-neutral policy environment, maintain the "buy" rating company's main business covering wetlands, forest parks and national storage forest projects, EPC service capacity industry leading, and good financial position. The newly signed order of the company's 19H1/20H1/21H1 is 59.22, 8.16, and 1.64 billion yuan. In 19, it is 4.120 billion yuan (Jiangdong Avenue upgrading and renovation project). We believe that the follow-up carbon neutralization policy is expected to continue to deepen, the company in ecological restoration, forestry carbon sequestration and other areas are expected to seize the opportunity for the development of the industry, orders are expected to continue to be full, promoting steady expansion. Considering the company's equity incentive target, we maintain the company's profit forecast for the time being. according to the latest equity calculation, the EPS for 21-23 is expected to be 1.05 and 1.24, 1.43 yuan, with reference to the comparable company valuation, giving the company 13 times PE in 21 years, with a target price of 13.65 yuan, maintaining the "buy" rating.
Risk hint: the recovery of orders is not as expected, the impact of the epidemic on domestic and foreign operations is higher than expected, and the development of new business is not as expected.
