Event: the company reported in 2022 that its operating income in the first half of the year was 28.76 billion yuan, an increase of 29.2% over the same period last year, and the net profit attributed to shareholders was 1.03 billion yuan, an increase of 32.4% EPS 0.66 yuan over the same period last year.
The 21-year winning project gradually landed, greatly boosting the performance in the first half of the year. The company achieved operating income of 28.76 billion yuan in the first half of the year, an increase of 29.2% over the same period last year, and a net profit of 1.03 billion yuan belonging to shareholders, an increase of 32.4% over the same period last year. The performance in the first half of the year improved greatly, mainly because the new bid-winning project entered the construction peak in 2022 last year.
From the perspective of business, the income of road and bridge construction business was 25.51 billion yuan, accounting for 88.7% of the business income, + 26.4% compared with the same period last year, while the revenue of maintenance engineering construction business was 989 million yuan, accounting for 3.44% of the business income, + 59.0% of the same period last year. In July 2021, Shandong Province issued the "Comprehensive Transportation Development Plan of the 14th five-year Plan of Shandong Province", which put forward clear highway maintenance indicators, maintenance mileage will continue to grow, the company is an early domestic enterprise in the field of road maintenance, and is the regional leader, so the maintenance project construction business income is growing rapidly, there is still a lot of room for the future.
During the period, the expense rate decreased and the net interest rate increased slightly. In the first half of 2022, the gross profit was 1.75 billion yuan, year-on-year + 29.1%, gross profit 11.1%, year-on-year-0.05pp, net profit 4.5%, year-on-year + 0.09pp, including road and bridge construction gross profit 10.51%, year-on-year-0.16pp, maintenance project gross profit 13.7, year-on-year-4.32pp. The period expense rate is 4.7%, year-on-year-0.08pp, mainly financial expenses year-on-year-3.1%, sales expenses-61.2% year-on-year.
The net cash flow generated by operating activities was-700 million yuan, a decrease of 2.91 billion yuan compared with the same period last year and-131.93% compared with the same period last year, mainly due to an increase in the completed workload in the first half of the year. The mismatch between sales payback and purchase payment time led to a decrease in net cash flow from operating activities compared with the same period last year. The impairment loss of assets is 60 million yuan, and the credit impairment loss is 70 million yuan. The cash-to-cash ratio is 67.86% and the cash-to-cash ratio is 73.5%.
The new bid for the project in the second quarter fell short of expectations. In the first half of 2022, the company signed a total of 341 newly signed orders, totaling 22 billion yuan,-30.2% compared with the same period last year, and the unfinished part of the signed orders totaled 99.21 billion yuan by the end of the second quarter. In the second quarter, the amount of newly signed orders was 14.49 billion yuan,-36.8% of the same period last year. By the end of the second quarter, a total of 87 contract orders had been won and not yet signed, with a total amount of 41.25 billion yuan. At the end of the first quarter, 54.58 billion yuan had been won, that is, 1.16 billion yuan was won in the second quarter. The project won the bid less than expected.
Based on the main industry, give full play to the core advantages of construction, and promote the business development of the upstream and downstream of the industrial chain. Since 2022, in the face of the impact of the epidemic and the economic downturn, the transportation industry has been strongly blessed by the policies of the state and Shandong Province, formulated clear mileage planning objectives, increased industry investment, and the company's main road and bridge construction industry has benefited from the policy support. will continue to maintain high growth rates. At the same time, in the face of the market demand for new infrastructure, the company has actively upgraded its business and opened up to the comprehensive development of urban areas, rail transit, water conservancy ports and navigation, ecological protection and other fields. The subsidiary maintenance group of the company is an early company in the field of road maintenance in China, distributing many green maintenance centers throughout the country, vigorously developing green innovative technologies such as geothermal regeneration, local cold recycling, plant-mixing hot recycling, plant-mixing cold recycling, etc.; subsidiary Laigang Green Construction, actively promote site standardization construction, assembly building construction and so on. As the company continues to improve the industrial structure and cultivate new profit growth points, the comprehensive competitive strength and sustainable development ability will be greatly improved.
Profit forecast and investment advice. It is estimated that the return net profit of the company from 2022 to 2024 is 2.75 billion yuan, 3.42 billion yuan and 4.05 billion yuan respectively, and the corresponding PE is 5 times, 4 times and 3 times respectively. Benefiting from the advantage of shareholders, the company has a good moat of competition in the industry, steady growth in revenue and profits, and maintains a "buy" rating.
Risk hints: macroeconomic downside risks, project winning less than expected risks, infrastructure investment less than expected risks.