The company released its 2018 mid-term report, with revenue of 4.937 billion yuan, an increase of 76.68%, and a net profit of 385 million yuan, an increase of 42.93%, an increase of 41.67%. The operating cash flow improved significantly in the second quarter, and the policy shifted to improve the project landing and high performance growth in the second half of the year.
Support the main points of rating
The performance grew rapidly, and the cash flow improved significantly in the second quarter: the company released the mid-2018 report, with an operating income of 4.937 billion yuan in the first half, an increase of 76.68%, and a net profit of 385 million yuan, an increase of 42.93%, an increase of 41.67%. Sales growth directly drives profit growth. The company's gross profit margin in the first half of the year is close to 26%, which is better than the same period last year. However, the increase in expense rate and income tax offset the profit level, resulting in a year-on-year decline in net interest rate. The main reason for the increase in expense rate is the credit crunch in the first half of the year, and the increase in project financing costs leads to an increase in financial expenses. In the second quarter, the company's operating cash flow was 585 million yuan, completed to become a regular employee, mainly due to the fact that some PPP projects gradually entered the late stage or operation payback period, and the cash flow improved significantly.
There are plenty of orders on hand, and the future performance can be improved: by June, the company has signed 11 new orders, with a total amount of more than 10 billion yuan, and is expected to sign 300-50 billion yuan for the whole year. At present, most PPP projects can be financed by banks, and the landing certainty is high. The company plans to acquire Jiangxi Zhongjianchengkai Environmental Co., Ltd., which is expected to maintain a growth rate of 30% in the next three years, which is expected to enhance the company's construction capacity in Jiangxi province. Under the influence of dual factors, the company's performance growth in 2018 has high certainty.
Policy turn, plate valuation repair company is expected to benefit: the recent policy shift to fully benefit the infrastructure sector, municipal gardens as infrastructure supporting, the marginal improvement of funds, the certainty of project landing is expected to increase. At the same time, the market preference has improved, and the valuation of the garden sector is expected to be fully repaired. The company's performance is well supported, and the stock price is expected to usher in Davis' double-click.
Main risks faced by rating
The landing of the project is not as expected, and the acquisition company is in coordination.
Profit forecast and valuation
It is estimated that the operating income of the company from 2018 to 2020 is 131,176.86 and 22.991 billion yuan, and the net profit of returning home is 11.15,15.95 and 2.124 billion yuan. The prediction of EPS is adjusted to 0.49,0.70,0.93 yuan. Maintain the overweight rating.
