1. Investment event
The company announces its 2018 half-yearly report. The company achieved revenue of 2.828 billion yuan in the first half of the year, an increase of 32.95% over the same period last year, and a net profit of 148 million yuan, an increase of 100.47% over the same period last year.
two。 Our analysis and judgment
High performance growth, design and general contracting business go hand in hand. The company's revenue in the first half of the year was 2.828 billion yuan, an increase of 32.95% over the same period last year; the net profit was 148 million yuan, an increase of 100.47% over the same period last year; the high growth of the company's performance was mainly due to the high growth of engineering design and general contracting business. Of this total, the revenue of the engineering design business was 1.668 billion yuan, an increase of 29.81% over the same period last year, and that of the general contracting business was 912 million, an increase of 46.15% over the same period last year. During the reporting period, the net cash flow of the company's operating activities was-490 million yuan, a decrease of 25.59% over the same period last year, mainly due to an increase in cash paid to employees and employees in the current period compared with the same period last year.
The profitability increased steadily and the expense rate decreased during the period. In the first half of 2018, the company's weighted ROE was 5.77%, up 1.32pct from the same period last year; gross profit margin was 23.53%, down 1.52 pct from the same period last year; and net profit was 5.92%, up 1.71pct from the same period last year. The increase in net profit mainly comes from the decline in the rate of sales and management expenses. During the reporting period, the company's expense rate was 17.40%, a decrease of 1.51pct compared with the same period last year. The administrative expense rate decreased to 16.38% compared with the same period last year; the financial expense rate increased by 0.16pct to 0.02% compared with the same period last year; and the sales expense rate decreased by 0.19pct to 1.01% compared with the same period last year. The asset-liability ratio was 64.1%, up 2.14% from the same period last year, mainly due to the increase in long-term M & A loans and special loans.
The newly signed orders are full, and the total contract orders have increased substantially. During the reporting period, the company signed a new contract of 5.589 billion yuan, an increase of 39.79% over the same period last year. The newly signed design consulting contract was 3.215 billion yuan, an increase of 15.20% over the same period last year, and the general contract was 2.374 billion yuan, an increase of 96.64% over the same period last year. With the gradual landing of orders, the company's annual performance is expected to grow at a high speed.
The effect of "large business platform" is remarkable, and the effect of overseas expansion is good. The company sets up a "big business platform" and strengthens the construction of the regional center. The company has set up South China Center, which has achieved initial results in regional planning and digital construction, Guangdong-Hong Kong-Macau Greater Bay Area planning and design and other projects. During the reporting period, the company focused on Vietnam and the Philippines to expand the "Belt and Road Initiative" market, signed 17 overseas projects such as Vietnam, Philippines and North Africa in the first half of the year, and achieved remarkable results in overseas business development.
3. Investment suggestion
It is estimated that from 2018 to 2020, the EPS of the company will be 0.82, 1.02, 1.24 respectively, and the corresponding dynamic price-to-earnings ratio will be 16-13-10, with a "recommended" rating.
Risk tips: investment in fixed assets has declined; the recovery of accounts receivable is not as expected.