Application scores and opinions

The group's clients include the private sector and the public sector. In 2016, the income distribution of the private sector accounted for 62%, and the public sector accounted for 38%. The Group has more than 46 years of experience in the foundation engineering industry and plans to upgrade its existing machinery and equipment in the future, including the purchase of more environmentally friendly and efficient new sinking machines, crawler cranes, hydraulic clocks and pre-drilling rigs, with a view to enhancing the competitiveness of the Group. At the same time, it also plans to hire additional staff to tie in with business development. However, the foundation engineering industry in Hong Kong is highly competitive and fragmented, and the group has only 0.8% of the foundation market in Hong Kong in terms of 2015 revenue. At present, there are 18 orders on hand for 18 projects, with a total amount of 623 million yuan, equivalent to 1.3 times the revenue in 2016. The Group expects to have a revenue of 405 million yuan in 2017. We assume that the net interest rate is about the same as 11% in the first four months of this year, and we forecast a profit of about 44 million yuan in 2017. In terms of the stock price, we estimate that the price-to-earnings ratio for 2017 is between 13 and 15 times, and the valuation is relatively high. At the same time, recently, a number of Hong Kong local engineering enterprises have been listed, but their share prices have not performed satisfactorily since their listing. To sum up, the company was given a "neutral" rating with a total score of 5.