Main points of investment:
Maintain and increase holdings. 2016H1's revenue is 465 million yuan (+ 292.38%), and the net profit is 74 million yuan (+ 480.12%). The net profit growth rate from January to September is expected to be + 100% to + 150%, which is in line with expectations. The company's extension / overseas efforts, the accelerated landing of metal roofing business, photovoltaic burst to boost performance, a fixed increase to replenish current to support the follow-up development, superimposed intelligent building transformation expectations, maintain and forecast the company's 17-year EPS of 0.54 pound 0.64 yuan in 2016. Maintain the target price of 17.50 yuan, about 32.4 times PE in 2016, and maintain an increase in holdings.
Increased profitability, operating net cash flow under pressure. 1) the gross profit margin is 29.84% (+ 14.65pct), the net profit rate is 15.93% (+ 12.38pct), and the increase in profitability is mainly due to the increase in revenue from opening up the market; 2) the net cash flow from operations is-116 million yuan (- 121.74%), which is mainly due to the increase in purchase payment due to the increase in business volume; 3) the expense rate during the period is 8.60% (- 9.98pct), mainly because the revenue growth rate of new projects is higher than that of three fees. 4) accounts receivable is 328 million yuan (+ 80%), accounting for 23.14% of the total assets, mainly due to the increase in income.
Performance burst inflection point at the beginning, roofing / photovoltaic will become two major engines. 1) merger and acquisition of Zhongwei firm / steel structure to introduce top design capability (2 academicians and 13 engineers in the team), actively develop overseas business (help to return Kazakhstan World Expo / Malaysia science and technology city construction), open up market space, improve profitability (overseas gross profit margin 32.67%, higher 2.88pct than domestic business), follow-up design / overseas business becomes a new growth point. 2) Photovoltaic business contributed revenue of 249 million (+ 2681.49%), the proportion increased to 53.58%, the prosperity of the industry was boosted, and the follow-up performance is expected to continue to improve; 3) hold hands with Fuxing Ruizhe, Zhongzhi Financial Holdings and other 8.73 yuan per share to raise no more than 700 million yuan, locked for three years, the third revised draft has been released, the follow-up project is supported by funds, and the source of the project is expected to be rich.
Catalyst: accelerated landing of overseas business, sustained breakthroughs in photovoltaic business, newly signed orders, etc.