Matters: in 2017, H1 achieved an operating income of 795 million yuan, an increase of 5.15% over the same period last year; a net profit of 61.8565 million yuan belonging to shareholders of listed companies, an increase of 9.60% over the same period last year; and EPS0.07 yuan per share, unchanged from the same period last year.
The company expects to achieve a net profit of 97 million yuan to 100 million yuan from January to September 2017, an increase of 6.02% and 9.29% over the same period last year.
The company reported stable growth and good expense control: the company's operating income / net profit increased by 5.15% and 9.60% respectively in the first half of 2017, and the overall growth rate was stable; from a quarterly point of view, the company's 2017Q1/Q2 achieved year-on-year revenue growth of-23.26%; net profit growth of-91.83% and 77.7% respectively; Q2 performance growth turned negative to positive, and the overall growth rate was stable.
The company's current sales expense rate / management expense rate / financial expense rate is 1.54%, 6.27% and 0.69%, respectively, which is lower than that of the same period last year. The overall control of the three expenses is good, of which the financial expenses are-293.97% compared with the same period last year. The main reason is that the interest income of Huayu Garden's long-term receivables has increased a lot. In addition, the net cash flow generated by the company's operating activities in the current period decreased by 48.47% compared with the same period last year, mainly due to the expansion of the company's garden business and the payment of more progress funds and deposits. The company expects the net profit from January to September 2017 to increase by 6.02% and 9.29%, mainly due to the steady growth of the garden business expected by the company, which will lead to an increase in overall performance.
The supporting role of the garden business is obvious, and the gross profit margin has declined slightly: the company launched the dual main business operation mode of "garden + packaging" in 2015, and the garden plate business is mainly carried by the subsidiary Huayu Garden. In 2017, H1 Huayu Garden achieved revenue of 519 million yuan, net profit of 70.7771 million yuan, contribution income ratio of 65.34%, obvious supporting effect. The revenue of the company's landscaping business increased by 6.67% over the same period last year, which was higher than that of other businesses, mainly due to the company's efforts to promote the development of PPP and EPC models, the continuous promotion of strategic cooperation among local governments, financial institutions and companies, and the expansion of Huayu garden project. The current gross profit margin of the company's garden business is 18.43%, which is lower than that of the same period last year. The main reason is that the structure of the garden business project is different from that of the previous year, the proportion of municipal basic projects increases, and the overall gross profit is lower than that of barren mountain greening projects.
Packaging business revenue fell slightly compared with the same period last year, optimistic about the development prospect of QR code bottle cap: the company's packaging business realized income of about 242 million yuan in the current period, accounting for about 30.5% of total revenue, of which the income of anti-counterfeit bottle cap business decreased by 4.58%, and the gross profit margin dropped 4.35pct compared with the same period last year. We believe that the main reason is the continuous upward impact of raw material aluminum prices, which account for more than 70% of the cost of anti-counterfeit bottle cap products during the year. Affect the gross profit margin of anti-counterfeit bottle caps. The company began to upgrade traditional bottle caps in 2015, implementing a QR code with one cap and one code. In the first half of 2017, the company made use of the strategic cooperation relationships of many well-known wineries to promote the functions of anti-counterfeiting and anti-counterfeiting of QR code bottle caps, anti-channeling goods, advertising, big data analysis, etc., prompting the company's traditional customers Niulanshan, Hongxing, Elite, Golden seed and other well-known brands to explore the QR code intelligent bottle cap, and it is expected that strategic cooperation will be reached in the follow-up. In addition, according to the China News, the company's regular QR code customers Mitsui Xiaobai, Jiang Xiaobai and Coconut Island deer turtles continued to land in 2016, providing protection for the company's follow-up performance.
Huayu Garden is full of orders on hand, and its business extends to the field of ecological restoration: the company's subsidiary Huayu Garden's main business is mainly municipal engineering and ecological greening project construction, and actively explore the extension to the field of ecological restoration. Since 2016, the bid-winning amount of Huayu Garden has reached 5.513 billion yuan. In the first half of 2017, Huayu Garden won the bid of 1.674 billion yuan, signed a new project contract of 3.509 billion yuan, and had more orders on hand. In August 2017, Huayu Garden and Anshun Forestry and Greening Bureau signed a contract for comprehensive ecological restoration (Phase II) project in Xixiu District, with a contract amount of 1.58 billion yuan. Huayu Garden extended the industrial chain to ecological and environmental protection, and its ability to take orders was significantly enhanced. sufficient orders on hand to ensure the high growth of the company's garden business.
Investment advice: buy-An investment rating, 6-month target price of 7.22 yuan. The company is a leading manufacturer of anti-counterfeiting bottle caps, actively exploring the layout of bottle caps "Internet +" since 2017; Huayu Gardens, a subsidiary, has sufficient orders on hand, and plays an obvious role in supporting the performance of the garden plate. We downgrade the company's valuation and expect the company's revenue to grow by 11.3%, 15.2% and 20.9% respectively from 2017 to 2019, and net profit to grow by 8.7%, 18.1% and 22.7% respectively. To maintain the Buy-An investment rating, the six-month target price is 7.22 yuan, which is equivalent to 38 times dynamic P / E in 2017.
Risk hint: QR code bottle cap promotion is not as expected, garden plate order landing is not as expected risk, and so on.
