Key points of investment
Instructions:
Investment points should include core elements such as the basic characteristics of the company, main business highlights, researchers' investment logic and recommendation basis, performance expectations, investment ratings, valuation analysis, and risk alerts.
The main points should be prioritized; the important ones come first. 3-5 key points, no more than 1000 words in total.
Risk warning:
Zhongheng Design released its 2022 semi-annual report: the company achieved operating income of 663 million yuan in the first half of 2022, an increase of 4.46% over the previous year; achieved net profit of 72 million yuan, a year-on-year decrease of 8.56%; and achieved net profit of Fumo after deduction of 74 million yuan, an increase of 11.81% over the previous year. Among them, Q2 achieved operating income of 384 million yuan, an increase of 4.99% over the previous year; achieved net profit of 501 million yuan, a year-on-year decrease of 16.09%; and achieved net profit of 48 million yuan after deduction, an increase of 5.98% over the previous year.
The company achieved operating income of 663 million yuan in the first half of 2022, an increase of 4.46% over the previous year, and net profit returned to the mother after deduction was 74 million yuan, an increase of 11.81%. On a quarterly basis, the company achieved revenue of 279 million yuan and 384 million yuan respectively in Q1 and Q2, up 2.79% and 3.84% respectively over the previous year. Following two consecutive years of negative growth in 2020 and 2021, the company's operating income began a steady recovery in the first half of 2022. By business, the design business and EPC achieved revenue of 385 million yuan and 184 million yuan respectively, up 0.92% and 13.61% respectively over the previous year. Revenue from the EPC business is growing fast.
The company achieved a comprehensive gross profit margin of 28.59% in the first half of 2022, an increase of 2.17 percentage points over the previous year; the net profit margin was 10.87%, down 1.43 percentage points from the previous year. The company's expense rate for the first half of 2022 was 17.19%, an increase of 0.11 percentage points over the previous year, mainly due to increased financial expenses.
The company's net operating cash flow in the first half of 2022 was 0.03 yuan per share, an increase of 0.50 yuan over the previous year. The improvement in operating cash flow was significant, mainly due to increased repayments from the general engineering contracting business. Judging from the payout ratio, the company's payout ratio and payout ratio for the first half of 2022 were 139.0% and 172.6% respectively. The year-on-year changes were +14.7 percentage points and -6.1 percentage points respectively. The company increased its repayment efforts, and the payout ratio increased dramatically.
Profit forecast and rating: We adjusted the company's profit forecast. We expect the company's EPS for 2022-2024 to be 0.77 yuan, 0.82 yuan, and 0.88 yuan respectively. The closing price corresponding to the closing price on August 8 corresponds to PE 11.8 times, 11.0 times, and 10.3 times, respectively, giving a “prudent increase” rating.
Risk warning: macroeconomic downside risks, on-hand orders falling short of expectations, project progress falling short of expectations, and risk of bad accounts receivable