Main points of the report
Event description
The consortium formed by the company and Jiangxi Shanhu Garden Construction Group Co., Ltd. won the bid for the recent infrastructure construction PPP project of Chifeng Trade and Logistics City (the second package) with a winning price of 267 million yuan. In addition, the company also won the bid for the reconstruction and expansion project section A1 of the Suibajie-Suihua section of the Harbin-Bei'an highway, with a winning amount of 160 million yuan.
Event comment
Winning the bid, effectively thickening the company's profits: the company announced that it jointly won the bid for the recent infrastructure PPP project of Chifeng Trade and Logistics City (the second package). At the same time, it won the bid for the reconstruction and expansion project of the Suibajie-Suihua section of the Harbin-Bei'an highway, with a total bid amount of 427 million yuan, accounting for 6.36% of 2015 revenue. In the future, it will effectively increase the company's revenue scale.
The project mode is the combination of PPP and BOT: the operation of Chifeng project adopts the cooperation mode of government and social capital, and the specific operation mode is BOT mode. The company, as a social capital, invests to set up a project company in accordance with the requirements, and the project company is responsible for the process of project planning, fund raising, construction implementation, operation management, debt repayment, asset management and project transfer, and is responsible for its own profits and losses. After the franchise period stipulated in the PPP project contract expires, it will be handed over to the government in accordance with the contract agreement.
Chifeng project further enhances the company's PPP business capacity: in recent years, the company has actively expanded its PPP business, set up an investment and financing department for PPP project operation, and actively expanded market channels. The smooth implementation of the Chifeng project will have a positive impact on the company's business work and performance, help the company to further accumulate project experience in the PPP field, enhance the market competitiveness of PPP business, further seize the market opportunity to develop the PPP project, and promote the upgrading of the company's business strategy.
Revenue growth, order volume, firm road of diversified development: as one of the 39 enterprises in the country that have obtained the special qualification of general contracting for highway construction, the company has a certain accumulation in terms of qualification, talent, technology, management, capital and so on. The company's first-half revenue was 2.249 billion, an increase of 6.23% over the same period last year, and a net profit of 4.35 million, an increase of 295.26% over the same period last year. In addition, 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. And the company completed the acquisition of Beilong Company and participated in Sen Yuanke Highway maintenance Company to further enhance the company's market competitiveness and enhance the ability of diversified business development. At present, the company is the listed company with the smallest market capitalization in the infrastructure sector, benefiting from order growth and performance improvement, the company will have high flexibility in the future.
It is estimated that the company's EPS in 2016 and 2017 will be 0.06 yuan and 0.08 yuan respectively, and the corresponding PE will be 120,87 times respectively, with a "buy" rating.
Risk hint: the economic downturn brings the risk that the development of the industry does not meet expectations and the PPP business does not meet expectations.