Core point of view
Dragged down by the construction of the PPP project, the performance was slightly lower than expected. 21H1 realized income / homing net profit / deducted non-net profit 103.0 million, YoY+2.5%/+7.3/-9.9%. Due to the sale of shares in Qingshan Lake and the recognition of the profit of the participating company during the reporting period, the net income on investment was 58.65 million yuan, and the deduction of non-net profit more truly reflected the operating performance. Q2 realized revenue / deducted non-net profit of 5.24 billion YoY-1.8%/-16.0% in a single quarter. Mainly because the company takes the initiative to control the construction rhythm of the PPP project, resulting in a large decline in PPP project revenue / profit, 21H1 PPP project construction income 1.92 billion, YoY-37.1%.
In addition, as a result of entering the PPP sector, infrastructure accounts for an increasing share of orders and revenue.
Traditional construction has improved quality and efficiency, and investment in PPP projects has maintained a high growth. During the reporting period, traditional construction revenue was 6.83 billion, YoY+20.1%, new construction orders were 10.46 billion, YoY+27.8%, projects were mainly distributed in developed areas, and public / factory / municipal projects accounted for 36.4%, and the order quality was continuously optimized. 21H1 company decoration and steel structure income 650 million, YoY+2.1%, growth slowed down, mainly dragged down by the curtain wall business, 21H1 subsidiary earth steel structure / principal curtain wall revenue of 48,000,000 and YoY+24.0%/-36.6% respectively. It is expected that 22H2 Xuancheng 300000 tons of steel structure production capacity is expected to be put into production, steel structure business growth is expected to accelerate. The investment income of 21H1's PPP project is 700 million, and YoY+39.7%, is expected to continue the high growth trend due to the addition of 5 new / partially operational projects.
Lay out the high-end manufacturing field and actively explore BIPV. The company takes the lead in aiming at aero-engine parts and strategically invests in aerospace technology. It currently holds about 19% of the shares, making it the second largest shareholder. 21H1 Aerospace Technology realized revenue / home net profit of 40 million, and YoY+39.8%/102.8%, as of 9: 3 Aerospace Technology has a market capitalization of about 8.7 billion. Recently, the company has conducted exchanges and cooperation with relevant companies in the photovoltaic field, and can carry out in-depth cooperation in the field of photovoltaic building integration BIPV in the future. At present, the company has comprehensively combed the roof resources on hand, and has arranged distributed photovoltaic power generation facilities on the roofs of some PPP projects for practice.
Financial Forecast and Investment suggestion
Slightly reduce the company's 21-23 year EPS to 0.54 EPS 0.58 EPS 0.62 yuan (the original EPS is 0.56 prime 0.64 yuan), taking into account the company's control of the construction pace of PPP projects, reduce the conversion assumption of newly signed orders / orders for PPP construction, reduce the proportion of PPP projects entering the buyback period, and reduce the assumption of revenue growth in decoration business.
The company's traditional construction business to improve quality and efficiency, actively explore the field of BIPV. With reference to the average valuation of a comparable company, we approve the granting of a 21-year 14XPE to the company with a target price of 7.56 yuan and a "overweight" rating.
Risk tips: order conversion rate, PPP payback progress and amount, steel structure business development is not as expected.
