Main points of the report
Event description
Sinochem Geotechnical released its mid-2016 report, with operating income of 924 million yuan during the reporting period, up 10.66% from the same period last year, gross profit 23.24%, down 2.29%, and net profit attributable to 79 million yuan, up 4.59% from the same period last year.
Based on this, it is calculated that the company's revenue in the second quarter was 494 million yuan, up 4.03% from the same period last year, gross profit 21.35%, down 4.77% from the same period last year, and the attributable net profit was 44 million yuan, up 0.15% from the same period last year.
Event comment
Revenue grew steadily and net interest rate declined slightly: infrastructure investment increased in the first half of the year, and revenue from the company's pile foundation and survey business increased by 171.42% and 1296.58% respectively, but the company's other three businesses declined and finally increased by 10.66%. On the profit side, the gross profit margin fell slightly due to the increase in the proportion of survey and pile foundation business with low gross profit margin. In terms of expenses, due to the increase in interest expenses, the financial expenses increased by 40.09%, and the salary increased, resulting in an increase of 21.48% in management expenses. In addition, asset impairment losses fell by 17 million, resulting in a 4.59 per cent increase in net profit.
The company forecasts that the net profit in the first three quarters will be 1463,173 million yuan, an increase of 10%, 30% and 0.04 million yuan. Based on this, it is calculated that the net profit in the third quarter will be 0.67 million yuan, with an increase of 16.85% and 63.81% EPS0.08 million 0.10 yuan.
The main business is sound, vertical integration to build core competitiveness: the company's main business is the geotechnical engineering field, the current industry concentration in this field is low, the future is expected to benefit from industry integration. The company acquired strong and distant Shanghai in 14 years, acquired Beijing Ashram and Beijing Zhongyan in 15 years, established Sinochem Geotechnical Design and Research Co., Ltd., and strengthened the company's main business competitiveness through a series of mergers and acquisitions.
Actively lay out the navigation field and seize the highland of airport construction: more than 500 navigable airports are expected to be built during the 13th five-year Plan period, and the future market space is huge. At present, the company has laid out the construction of a number of general airports, in addition, through Zhejiang Zhongqing to enter the navigation town. The company won the bid for the second phase expansion project of Haikou Meilan International Airport in July, which is expected to thicken the company's future performance.
Diversified mergers and acquisitions cultivate new profit growth points: the company set to increase capital by 430 million in the first half of the year to hold three subsidiaries, namely, Lixing Engineering, theme Latitude and Zhejiang Zhongqing. After the completion of the acquisition, the company will further enhance its underground space development strength. At the same time, it will enhance its operating capacity in the navigation airport. In addition, the company also has cultural communication, Internet finance, insurance, chip technology and other business platforms, future performance is expected to blossom.
It is estimated that the company's EPS in 2016 and 2017 will be 0.20 yuan and 0.25 yuan respectively, corresponding to 38 times and 30 times PE respectively, with a "buy" rating.