High performance growth, photovoltaic and metal roofing systems
The company's 2016H1 realized revenue of 465 million yuan, YoY+292%; realized net profit of 74.06 million yuan belonging to shareholders of the listed company, YoY+480%;EPS 0.10 yuan, and YoY+229%; operating cash flow-116 million yuan, a decrease of 63.49 million yuan compared with the same period last year. Among them, 2016Q2 realized revenue of 373 million yuan, YOY+219%; vested net profit of 62.67 million yuan, YoY+159%. The company's quarterly report predicts that the growth rate of performance in the first half of 2016 will be between 448% and 495%, and the actual performance is in line with expectations. The company's beautiful performance benefits from the simultaneous development of photovoltaic business and metal roofing system. The company announced that the net profit for the first three quarters of 16 years is expected to be between 1.64-245 million yuan and YoY 0-50%.
Maintain good profitability, good control of expense rate, and deterioration of cash flow
The comprehensive gross profit margin of 2016H1 is 29.8%, which is basically unchanged from 29.2% of 15H1. On the one hand, the proportion of photovoltaic business with relatively low gross profit margin (22.3%) has increased rapidly, on the other hand, the gross profit margin of individual business has increased, and the effects of the two factors offset each other. The company continues to expand in the field of photovoltaic, undertaking a number of distributed photovoltaic projects, its revenue 2016H1 reached 249 million yuan, accounting for 54%. Benefiting from the high-speed rail, airports, stadiums and other infrastructure market segments of the magnificent demeanor, metal roofing enclosure 2016H1 12 new projects, 7 projects to be started, revenue-side growth is as high as 93%. During the period, the expense rate was 8.6%, compared with 18.6% of 15H1, mainly due to faster growth at the income end. The operating cash flow of 2016H1 is-116 million yuan, YoY-121.74%. We judge that the main reason for the deterioration of cash flow is that the installation of photovoltaic power stations requires partial funding.
Industrial chain integration, fixed increase and replenishment to lead to investment
2016H1 acquired 90% equity of Zhongwei structural Design and Zhongwei Steel structural Design, bringing advanced design concepts and methods to the company, upgrading the company's leading design capability in the field of metal roof maintenance system to the entire architectural design field, and promoting the upward extension of the industrial chain. 2016H1, the company proposed to supplement the stream no more than 700 million yuan, the introduction of Fosun, Zhongzhi, Oriental Venture Capital and Haier Venture Capital and other war investments. Both metal roof maintenance system and distributed photovoltaic EPC need advance capital, and the amount of liquidity capital is large. At the same time, the company will further expand overseas markets and consolidate its market position and competitive advantage in the field of metal roof enclosure system. Benefiting from the magnificent demeanor of the downstream subdivision and the company's strong order taking and execution ability, we judge that the company's performance will continue to grow high, and do not rule out breakthroughs in the lower reaches of the industrial chain such as intelligent buildings.
Continued high performance growth, maintaining a "buy" rating
It is estimated that the EPS of the company in 2016-18 will be 0.53 YOY+48%/30%/28%, 0.69 YOY+48%/30%/28%, 0.88 yuan, and the next three years CAGR+35%. Taking into account the company's growth and comparable company valuation, we believe that the company can be given a 16-year 30-35 times PE, corresponding to a reasonable valuation range of 15.9-18.6 yuan, to maintain the "buy" rating.
Risk hints: infrastructure promotion does not meet expectations; fixed growth does not meet expectations; RMB exchange rate fluctuations and so on.