Main points of investment
The company achieved operating income of 391 million yuan in the first half of 2017, a decrease of 21.67% over the same period last year, mainly due to the pressure on owners' funds and slow progress of projects under the influence of real estate regulation and control policies in recent years. And the impact of "business reform and increase" on the income statistics of construction enterprises. (1) the company's income from public clothing, home decoration, curtain wall and design business in the first half of the year was 250 million yuan, 62 million yuan, 72 million yuan and 7 million yuan respectively, an increase of-27.23%,-13.43%,-6.30% and-1.99% respectively over the same period last year. The proportion of income was 63.97%, 15.83%, 18.52% and 1.68%, respectively. The sharp decline in the two major businesses of public decoration and residential decoration is the main reason for the decline in the company's revenue. (2) the proportion of revenue in the central and southern region rose sharply to 89.35% from 61.14% in the same period last year; (3) the company's Q1 and Q2 single-quarter revenue decreased by 22.92% and 20.62% respectively compared with the same period last year.
The company achieved a comprehensive gross profit margin of 14.02% in the first half of 2017, an increase of 0.24% over the same period last year, mainly due to higher gross profit margins in curtain wall decoration and design business. (1) the company's Q1 and Q2 realized gross profit margins of 13.36% and 14.57% respectively, up-1.20% and 1.44% over the same period last year; (2) the gross profit margins of public decoration, home decoration, curtain wall and design business increased by-1.21%,-0.81%, 6.08% and 3.88% respectively over the same period last year.
The company achieved a net interest rate of 6.03% in the first half of 2017, an increase of 0.76% over the same period last year, mainly due to a significant reduction in the proportion of impairment losses on operating taxes and additional superimposed assets; the proportion of expenses in the period was 5.17%, an increase of 1.27pct over the same period last year, mainly due to an increase in the scale of expenses and a decline in income during the period.
The company's asset impairment loss accounted for 0.41% in the first half of 2017, down 1.10% from the same period last year.
It is mainly due to the influence of the age structure of accounts receivable. The net operating cash flow per share was-1.01 yuan, down 1.11 yuan from the same period last year, which was worse than the same period last year, mainly due to a sharp decline in the cash-to-income ratio.
Earnings forecast and rating: the company's EPS from 2017 to 2019 is expected to be 0.49,0.50,0.51 yuan respectively, and the corresponding PE is 65.1,63.8,62.0x, maintaining the company's "overweight" rating.
Risk tips: real estate regulation and control, newly signed orders do not meet expectations, project payback is not smooth
