Key points of investment
Academy of Construction Science and Technology: Comprehensive service provider for green building design. The company's main business includes architectural design, green building consulting, ecological city planning, public trust services, etc., actively experimenting with innovating and developing green integrated operation (DOT) models, and cultivating new products such as B2C technical services for green living environments (HOME+). In 2013-2016, the company's operating income CAGR = 6.10%; in 2016, it achieved net profit of 346 million yuan and 32 million yuan respectively from operating income to the mother, up 45.18% and 23.40% respectively over the previous year. The controlling shareholder of the company is Yuanzhi Investment, which directly holds 66 million shares of the company, accounting for 60% of the company's total share capital, and the Shenzhen State-owned Assets Administration Commission holds up to 100% of the shares invested, and is the actual controller of the company.
The company's four major businesses go hand in hand and develop collaboratively. The company is based in South China, covers the whole country, and is gradually developing into Hong Kong and Macao. The four major businesses of architectural design, green building consulting, ecological urban planning, and public trust services went hand in hand. In 2016, the revenue of the four major businesses accounted for 24.71%, 24.54%, 15.22% and 24.89% of total revenue respectively. The urban planning business is an emerging business that is growing rapidly. The public trust service business has shown a continuous rapid growth trend and has become the company's main business growth point. The architectural design and construction consulting business continues to be an important part of the company's revenue today.
Six major advantages, such as technological research and development advantage+brand influence, create competitiveness. Judging from the gross margin of each business, the highest credit service is about 50%. The company has developed in-depth cooperation with many domestic and foreign institutions, has been deeply involved in the field of green building design for many years, and has deep scientific and technological innovation research and development capabilities; it has also received many honors and undertook many iconic building design projects. It has complete professional qualifications and covers a wide range of areas. The company focuses on business model innovation, emphasizes collaborative development between business industry chains, continuously improves management standards, and has established a high-quality management team and professional talent team.
The future development of the company. In the future, the company will continue to increase investment in technology research and development, actively explore innovative development of green technology and integrated service (DOT) models, and accelerate the expansion of B2C green technology service business: HOME+ business, focusing on talent introduction and training, and establishing a special incentive system based on the contribution value of employees in science.
Profit forecast: We forecast the company's net profit for 2017-2019 to be 39 million yuan, 47 million yuan and 56 million yuan respectively. Taking into account the dilution factor of newly issued shares, the EPS for 2016, 2017, and 2018 calculated based on the total share capital of 146.67 million shares after issuance was 0.26 yuan, 0.32 yuan and 0.38 yuan respectively. Referring to the valuation levels of comparable listed companies, combined with the company's future development space, we think we can give 20-30 times more PE in 2017. The corresponding price range is 5.2 to 7.8 yuan.
Risk warning: new orders fall short of expectations, repayment risks, business development falls short of expectations
