Items:
The company released the mid-2022 report: during the reporting period, the company achieved operating income of 967 million, year-on-year-24.27%, mother-to-mother net profit of 178 million, year-on-year-35.78% BI 22Q2 business income of 537 million, year-on-year-28.69%, home net profit of 96 million, year-on-year-45.75%.
Comments:
Income turned negative compared with the same period last year, and the value of newly signed contracts maintained a high growth. The company's 22H1 realized operating income of 967 million, year-on-year-24.27%, and home net profit of 178 million, year-on-year-35.78%. The company's performance turned negative compared with the same period last year, and we believe that under the influence of macro factors such as repeated domestic epidemics, the negotiations and construction progress between the company and the project contractor and the government have been affected, resulting in a decrease in business. In terms of orders, the company's 22H1 signed a total of 5 new contracts, totaling 2.075 billion yuan, + 78.22% compared with the same period last year, and 2 new winning projects, totaling 601 million yuan,-50.67% compared with the same period last year.
Profitability is under pressure and cash flow is improving. The company's 22H1 gross profit margin is 29.61%, year-on-year-1.67pct, net profit rate is 18.32%, year-on-year-3.54pct, the overall profitability is under pressure. The management expense rate / R & D expense rate / financial expense rate is 4.0%, 3.2% and 0.9%, respectively, which is + 0.9pct/+0.7pct/+1.1pct compared with the same period last year, and the expense rate increases slightly, in which the increase in financial expenses is mainly due to the increase in bank loan interest; the company's 22H1 asset-liability ratio is 59.89%, which is mainly due to the increase in short-term borrowing, and the overall debt ratio is near the median of the industry. Net operating cash flow-249 million yuan, year-on-year + 8.80pct, mainly due to the increase in project funds.
Ecological restoration + municipal landscape two-wheel drive, forestry carbon sequestration business active layout. 1) focus on the advantages of the main business, and the EPC model continues to advance. The company persists in optimizing its business and strategic upgrading, vigorously opening up the market, promoting the construction of projects in the fields of water ecological treatment, mine restoration and forest parks, and undertaking the EPC project of rural domestic sewage treatment project of Qilu Lake in Tonghai County, the general contracting project of municipal infrastructure project in Donghu District of Qiubei County, and the third phase of Kunshan Fleton International Education Project. In addition, the construction project of Dianchi Wetland Park in Jiangyou City, the EPC project of Taishan area Shanshui Lintian Lake Caopan River and the general contract of Dongping Lake ecological shelterbelt construction are all in progress in an orderly manner. At the same time, actively explore innovative business cooperation models, focus on the Yangtze River Delta region, Guangdong-Hong Kong-Macau Greater Bay Area, seek comprehensive and in-depth cooperation opportunities, the company's business development capacity is expected to be further enhanced; 2) Forestry carbon sequestration business continues to deepen the layout: during the reporting period, the company signed a "Strategic Cooperation Agreement" with Yongping County, Yongde County and Luzhou Aviation Development Group Investment Co., Ltd. to jointly develop forestry resources. In addition, actively explore the ecological culture travel business model, the future may become a new growth point of the company's business.
Profit forecast, valuation and investment rating: considering that the progress of the project is affected by macro factors such as repeated domestic epidemics in 2022, we adjust the company's EPS for 2022-2024 to 1.17x1.38x1.62 yuan per share (the original value is 1.28pence 1.49company1.73 yuan per share), and the corresponding PE is 11x/9x/8x. According to the historical valuation method, 13x PE is given in 2022, with a target price of 15.2 yuan per share. Maintain the "push" rating.
Risk tips: garden industry investment decline risk, new projects to undertake less than expected, project rebate less than expected, and so on.
