Main points of investment
Tianyu Ecology: a comprehensive garden enterprise that ranks in the first echelon. The company is a comprehensive landscaping enterprise, focusing on the design and construction of landscape ecological engineering, and has gradually joined the ranks of the first echelon of national landscaping enterprises. The company achieved an operating income of 826 million yuan in 2016, an increase of 0.64% over the same period last year, and a net profit of 110 million yuan, an increase of 11.91% over the same period last year. The actual controls are Luo Weiguo and Mr. Shi Dongwei.
"large industries, small companies", the concentration of landscape engineering industry is low. According to different types of customers, the landscaping market can be divided into municipal public gardens and real estate gardens. The scale of government investment in urban greening directly determines the development prospect of municipal gardens, while the development of the real estate market determines the future development scale of real estate gardens. The investment in urban landscaping in China reached 181.76 billion yuan in 2014, and the market capacity is expected to exceed 200 billion yuan in 2016. according to the calculation that 2-3% of the real estate investment is spent on gardens, the market size of real estate gardens in 2016 is expected to be between 2090.78 and 327.873 billion yuan. The landscape engineering industry has the characteristics of low barriers to entry, regional separation, scattered demand side, and labor-intensive, resulting in extremely fragmented and low concentration of the industry; in 2014, the CR4 of the industry was 4.44% and the CR50 was 17.85%.
The rapid development of municipal garden engineering business has contributed to the company's main source of profit. The company's revenue mainly comes from garden ecological engineering and landscape two major plates, landscape ecological engineering accounts for about 90% over the years. Among them, the revenue of municipal garden projects increased rapidly, from 289 million yuan in 2013 to 677 million yuan in 2016, with a compound annual growth rate of 32.8%, and the proportion of total garden project income increased from 44.7% in 2013 to 87.7% in 2016. gradually become the company's main source of income. From the perspective of subdivision, the gross profit margin of municipal projects is significantly higher than that of real estate projects, while municipal garden ecological engineering projects have always contributed the main gross profit, of which the gross profit of municipal projects accounted for 98.5% of the gross profit of garden ecological projects in 2016.
The company has perfect market layout and outstanding cross-regional management ability. The company has set up three major design centers in Beijing, Shanghai and Guangzhou, and set up molecular companies in Beijing, Shanghai, Chengdu, Lanzhou, Xi'an, Wuhan, Qingdao, Qinghai and other provinces and cities. in recent years, the business undertaken is mainly distributed in southwest, northwest, central and eastern China. At present, the company has the ability of national business contracting and cross-regional garden construction project management. In addition, the company has rich experience in high-tech engineering and outstanding comprehensive competitiveness, ranking 12th among the top 100 enterprises with comprehensive competitiveness.
Profit forecast and valuation: we predict that the company's net profit for 2017-2019 is 128 million yuan, 148 million yuan and 165 million yuan respectively, and the corresponding EPS for 2017-2019 is 0.74 yuan, 0.86 yuan and 0.96 yuan respectively. With reference to the valuation level of comparable listed companies, and combined with the future development space of the company, we think that we can give 30-40 times PE in 2017, with a corresponding price range of 22.2-29.6 yuan.
Risk tips: macroeconomic downside risks, accounts receivable recovery risks, newly signed orders are not as expected