1. Investment event

On August 11, 2018, the company announced its 2018 half-yearly report.

two。 Our analysis and judgment

The performance is growing steadily. In the first half of 2018, the company achieved an operating income of 577 million yuan, an increase of 49.61% over the same period last year. The high growth of the company's operating income was mainly due to the income of 557 million yuan from the garden and ecological engineering construction business during the reporting period, an increase of 54.46% over last year. The company realized a net profit of 46 million yuan belonging to shareholders of listed companies, an increase of 12.95% over the same period last year, mainly due to the substantial growth of newly signed contracts and the continuous landing of the project during the reporting period.

The newly signed order has a high growth and the performance is guaranteed. The company signed a new order of 2.632 billion yuan in 2017, which is 2.78 times the revenue in 2017. In the first half of 2018, the company and its subsidiaries signed a total of 38 contracts, totaling 740 million yuan, an increase of 255.79 percent over the same period last year. During the reporting period, the company won the bid for the 11th section greening project of the ecological corridor landscape upgrading project for the Chongli Winter Olympic Games, the first section of the Loushanguan scenic spot upgrading project in Tongzi County (EPC), the general contract for the design and construction of Nanxi River Regulation and Landscape Engineering in Tongzi County (EPC), and the PPP project along the Yangtze River in Qujiang District (the second). The company's newly signed orders have a high growth, and the performance is guaranteed.

The marginal improvement of credit and financing environment has benefited the landscape ecological industry. As of August 9, 2018, the median credit spread of architectural decoration industry debt has narrowed to 191.43BP, and the credit environment has improved. In addition, the central bank requires the allocation of low-grade credit bonds, and the Banco Insurance Regulatory Commission requires more loans to private enterprises, including small and micro enterprises; at the same time, some details of the new rules on capital management are relaxed, allowing public offering to be non-standard, which is conducive to the continuation of non-standard financing; recently, the executive meeting of the State Council called for ensuring the reasonable financing needs of financing platform companies and speeding up the issuance and use of 1.35 trillion yuan of local government special bonds this year. The marginal improvement of credit and financing environment has benefited the landscape ecological industry.

3. Investment suggestion

It is estimated that the EPS of the company from 2018 to 2020 will be 0.60 yuan 0.71 / 0.84 yuan respectively, and the corresponding dynamic price-earnings ratio will be 16-14-12 times respectively, giving it a "recommended" rating.

Risk tips: investment in fixed assets has declined; overseas business has fallen short of expectations; and the recovery of accounts receivable has fallen short of expectations.