The company released its semi-annual report for 2018, with revenue of 407 million yuan in the first half of the year, an increase of 23.87% over the same period last year, and a net profit of 14 million yuan, down 20.56% from the same period last year. The non-return net profit was 8.9371 million yuan, an increase of 417.47% over the same period last year. The comments are as follows:
With a substantial increase in revenue, there is still much room for the release of output value.
During the reporting period, 37 companies won bids, with a bid-winning amount of 985 million yuan, an increase of 27.43 percent over 773 million yuan in the same period last year. The number and amount of bids won in construction business increased greatly, among which the winning amount of municipal projects with higher profit margins increased significantly compared with the same period last year. The company's operating income in the first half of the year was 407 million yuan, an increase of 23.87% over 329 million yuan in the same period last year, and revenue in the second quarter increased by 34.5% over the same period last year.
The operating income of the construction business was 337 million yuan, an increase of 35.90% over the same period last year, accounting for 82.80% of the total revenue, while the operating income of the futures brokerage business was 21 million yuan, down 28.95% from the same period last year. The company is deeply involved in the construction of the airport new city, and most of the PPP projects are key projects in the high-tech zone. under the current policy background of speeding up the construction of stock projects, the carry-over income of on-hand orders is expected to accelerate. The company's overall gross profit margin is 18.14%, of which the gross profit margin of the construction business is 6.94%, an increase of 2.56% over the same period last year. With the start of municipal projects, the gross profit margin of the construction business is expected to continue to increase; the gross profit margin of the futures brokerage business is 100%. Is the company's main source of profit.
The growth rate of deducted non-profit increased significantly, and the expense rate decreased during the period.
The company's expense rate during the first half of the year was 13.13%, down 4.92 percentage points from the same period last year. Among them, the sales expense rate decreased by 4.10% compared with the same period last year, mainly due to the decrease in staff compensation and amortization expenses, the management expense rate decreased by 0.85% year-on-year, and the financial expense rate increased by 0.03% year-on-year.
The loss of asset impairment in the current period was 5.71 million yuan, an increase of 213% over the same period last year.
The company's parent net profit decreased by 20.56% compared with the same period last year, mainly due to the liquidation of Chengdu Pante Industrial Co., Ltd., a foreign investment unit in the same period last year, and confirmed that the liquidation income was 15 million yuan, which belongs to non-recurrent profit and loss. If you consider deducting non-homed net profit, the growth rate will increase by 417.47% compared with the same period last year, and the growth rate will continue to maintain a high level in the second half of the year with the release of performance.
The outflow of futures margin increased and the operating cash flow changed from positive to negative.
The company's income-to-cash ratio in the first half of the year was 91.97%, down 78.95 percentage points from the same period last year. The cash-to-cash ratio was 44.16%, down 49.68 percentage points from the same period last year. The net cash flow of the company's operating activities was-276 million yuan, which turned negative from 142 million yuan in the same period last year, mainly due to the increase in the net outflow of futures trading margin in the first half of the year.
Investment suggestion
The company's revenue growth rate in the first half of 2018 was steady, and the scale and profitability of the construction business were greatly improved. Although the growth rate of net profit is negative, the deduction of non-net profit has increased significantly and the quality of profit has been improved.
With the start of the project in the second half of the year, the output value will be further released, and performance growth is expected to continue to accelerate.
We maintain the company's EPS of 0.15,0.30,0.58 from 2018 to 2020, with a target price of 10.63 yuan, corresponding to an 18-year PEG of 0.74, and maintain an "overweight" rating.
Risk hint: the growth rate of fixed asset investment is declining rapidly; business development is not as expected.