The main points of the report.
Infrastructure small market capitalization PPP scarce target.
The company is a listed company formed by Heilongjiang Highway and Bridge Construction Group Co., Ltd. to reorganize the assets of Beiman Special Steel Co., Ltd. The company has concentrated equity and stable structure, which is controlled by the Provincial Construction Group and actually controlled by the Provincial SASAC. The company has undergone many restructuring, has a long history, and has a full range of business and high qualification, including highway engineering, bridge engineering, airport municipal engineering, tunnel engineering and subway engineering. In addition, the company has business all over the country, extensive international cooperation, steady increase in revenue and net profit, and an upward trend in growth. At present, the market capitalization of the company is the second to last in the whole construction industry, with a certain degree of scarcity.
Triple benefits promote the rejuvenation of the industry.
First of all, in the current environment of overall economic downturn, only infrastructure investment outshines others, and it will also be an important focus for the government to maintain steady growth for some time to come. Secondly, the current PPP model is in full swing, and the construction industry is the industry that most directly benefits from the PPP model. At the same time, there are a large number of PPP projects in the field of transportation, including 1132 projects, accounting for 12%. In terms of amount, the transportation industry also takes the lead, with PPP investment of 3.3233 trillion, accounting for 31%. And the company, as the leader in the field of infrastructure in Northeast China, will fully benefit from the growth of PPP projects in Northeast China. In addition, revitalizing the Northeast has once again been raised to the national strategic level, and the company is also expected to benefit from creating the driving force of regional endogenous growth in many aspects in the future.
Future development has an endogenous driving force.
The company won a total of 47 projects and 57 bidding sections in the first half of the year, with a total amount of 3.298 billion yuan. In addition, the company announced in September that it jointly won the bid for the PPP project of Chifeng Trade and Logistics City (the second package), as well as the Harbin-Bei'an highway project, with a total bid amount of 427 million yuan, accounting for 6.36% of 2015 revenue. Sufficient orders provide guarantee for the company's future performance. In addition, the company through the acquisition of Beilong Company to enhance regional competitiveness, in the comprehensive business qualifications and project integration have been significantly improved.
The company's inventory balance in the first half of the year is 4.082 billion yuan, of which 2.813 billion yuan is the completed unsettled assets formed by the construction contract. With the arrival of the settlement period at the end of the year, this part of the profit will be realized, thus making a significant increase in the company's profits. And as the only listing platform of Heilongjiang Construction Group, the company is expected to benefit from the integration of state-owned resources under the background of state-owned enterprise reform, and may acquire and merge more assets of the Construction Group in the future to strengthen the company's core competitiveness in the northeast region.
It is estimated that the company's EPS in 2016 and 2017 will be 0.06 yuan and 0.08 yuan respectively, with a "buy" rating corresponding to PE of 120 and 87 times, respectively.