Event: the company publishes its 2021 semi-annual report. During the reporting period, the company realized operating income of 634 million yuan, down 2.10% from the same period last year, and its net profit was 78.9146 million yuan, down 23.10% from the same period last year, mainly because the change in the fair value of the invested fund decreased by 16.6687 million yuan compared with the same period last year. After deducting non-return, the net profit was 66.2509 million yuan, down 7.14% from the same period last year.
The performance remains basically stable and the cost control is good. In 2021, H1 realized operating income of 634 million yuan, down 2.10% from the same period last year. Of this total, design revenue was 354 million yuan, up 5.67% over the same period last year. X EPC revenue was 162 million yuan, down 18.12% from the same period last year.
The net profit after deducting non-return to the mother was 66.2509 million yuan, down 7.14% from the same period last year; the net operating cash flow was-130 million yuan, mainly due to the decrease in revenue from the main business and the increase in labor costs and related taxes and fees paid over the same period last year. The company's gross profit margin of H1 in 2021 was 26.42%, an increase of 0.24pct over the same period last year; the expense rate for the period was 17.08%, an increase of 2.34pct over the same period last year. In the first half of the year, the company's financial expense rate decreased by 0.13pct compared with the same period last year; the management expense rate increased by 2.48pct compared with the same period last year.
Strengthen the market development efforts, improve the business layout is expected to open up the market potential. During the reporting period, the company attached importance to the development of markets such as Huaihai Economic Zone and Central China, and successfully won the bid for the conceptual architectural scheme design of Chongqing Liangjiang Collaborative Innovation Zone, Wuhan Aisha International Education Project, a large number of major projects, such as the new infrastructure project of Digital economy Industrial Park in Xingyang City, Henan Province, and the second phase of Dushuhu Hospital in Suzhou City.
In July 2021, Zhongheng Design Group Liaoning Branch was established in Shenyang, with business radiating the whole northeast region and completing the splicing of the company's national layout. Various molecular companies take advantage of the collectivization of listed companies to cooperate with each other and jointly expand the business market.
The company's newly signed design contracts totaled 694 million yuan, an increase of 22.09 percent over the same period last year.
Employee incentives have been further strengthened. During the reporting period, the company implemented a high dividend scheme: the company paid cash dividends of 6.25 yuan (including tax) to all shareholders for every 10 shares, and distributed cash dividends of 170 million yuan, accounting for 78.05% of the net profits of shareholders belonging to listed companies in 2020. In January 2021, the company listed the second phase of restricted stocks under the stock option and restricted stock incentive plan in 2018, unlocking a total of 55 incentive objects and unlocking 1.497407 million shares, which greatly mobilized the enthusiasm of the company's middle and senior managers and core employees. During the reporting period, the company actively implemented the share buyback plan, with a total repurchase of 1940248 shares, accounting for 0.70% of the company's total share capital, with a total transaction amount of 17987567.56 yuan (excluding transaction fees). All the repurchased shares are used for follow-up equity incentive plans or employee stock ownership plans. The smooth implementation of the buyback has laid a solid foundation for the subsequent implementation of the equity incentive plan or employee stock ownership plan.
Investment advice: from 2021 to 2022, the company's EPS is expected to be 0.96pm 1.15 yuan per share, and the corresponding dynamic price-to-earnings ratio is 9.7pm 8.11 times, maintaining the "recommended" rating.
Risk hints: the risk of increasing competition in the industry; the risk that newly signed orders fall short of expectations; and the risk of a decline in fixed asset investment.