Events:
The company released its 2018 semi-annual report on August 21, 2018.2018. In the first half of 2018, the company achieved operating income of 459 million yuan, an increase of 55.36% over the same period last year; net profit of 50 million yuan, an increase of 64.41% over the same period last year, and an increase of 64.99% over the same period last year. Of this total, Q2 realized operating income of 322 million, an increase of 42.9%, and a net profit of 45 million, an increase of 60.27%.
Viewpoint:
1. The listing accelerates the transformation of the order, and the highly flexible performance growth is in line with expectations.
Listing accelerates the transformation of bills of lading. The company was listed in 2017.3, and the financing convenience and brand advantages during the IPO inertia period significantly improved the business acceptance speed of PPP and EPC. According to available data, the cumulative newly signed orders of 2017Q3/2017/2018H1 are 1.42 billion / 1.71 billion / 2.35 billion, respectively, and the corresponding current income ratio is as high as 2.8pm, which is significantly higher than that before listing. Effectively accelerate the transformation from a traditional landscape engineering construction enterprise to a large-scale project solution provider providing the integration of business planning, planning and design, construction, investment and financing, operation management and information services.
Accelerate the undertaking of the PPP project, and it is expected that the project will be carried out without risk and will continue to release performance. Since the listing of the company, the company has begun to undertake the business transformation of PPP business assistants. 2017/2018H1 's newly signed PPP orders are 560 million / 2.1 billion respectively, accounting for 90% of the newly signed contracts. Currently, there are five projects in hand, with a total investment of 2.81 billion, and the project construction period is all in 2-3 years, effectively supporting future performance. The company's cumulative static investment of project capital in five projects is only 220 million, which does not constitute a significant financial pressure, and the company's asset-liability ratio at the end of the reporting period is only 61%, although it has significantly increased by nearly 17 pct over the same period last year, compared with companies in the industry, it is still at a lower level and there is still more room for development.
Abundant orders promote the rapid growth of core business, and high elastic performance is expected to maintain the growth rate in the future. During the reporting period, the company's construction and greening maintenance business achieved revenue of 430 million, accounting for 93%, with an increase of 53%. The revenue of landscape design reached 30 million, accounting for 7%, with an increase of 114%. The overall revenue reached 460 million, with an increase of 55%, and the net profit was 50 million, up 64% and 65% respectively. The revenue growth rate steadily increased by nearly 14 pct over the same period last year, and the profit growth rate decreased by nearly 37 pct over the same period last year, but remained at a high level. At present, the company's performance is highly flexible, and the abundance of on-hand orders is expected to promote rapid performance growth in the next three years.
2. The increase of gross profit of PPP business also increases the financial pressure, superimposing the adjustment of accounting subjects, resulting in a steady increase in the overall profit level and an increase in investment cash outflow.
Both gross profit margin and period rates have risen, and the overall profit level has risen steadily. The gross profit margin in the first half of the year is 27.04%, which is nearly 2.7 pct higher than that of 2017H1/2017 for the whole year, and the fee for the period is 14.04%, which is nearly 1.3 pct higher than that of 2017H1/2017. The overall profit level is steadily rising, with a net profit rate of 10.94%, which is nearly 0.6 pct higher than that of 2017H1/2017 for the whole year. It is judged that the increase in gross profit margin is mainly due to the increase in the contracting business of PPP and EPC, the improvement of project gross profit margin, and the transfer of some operating costs to sales expenses after readjusting the subdivision of accounting items. The increase in the rate during the period is mainly due to the increase in the sales rate from 0% in the same period last year to 0.57% in the reporting period due to the re-breakdown of accounting accountings. in addition, with the increase of PPP/EPC business, the demand for advance capital increased, and the financial rate increased to 2.7% due to the increase in loans, which was nearly 1.3 and 2.7 pct higher than that of 2017H1/2017 for the whole year.
The cash ratio of receipt and payment decreased compared with the same period last year, and the operating cash flow remained stable. The ratio of receipt to cash in the first half of the year was 53%, 85%, respectively, which was lower than that of 2017H1/2017 's 68%, 124% and 57%, 88% respectively, especially significantly lower than that of the same period last year. The net outflow of operating cash flow of 125 million was basically the same as that of 129 million in the same period last year.
PPP business led to an increase in investment cash outflows. During the reporting period, the net investment cash outflow of 112 million was further larger than that of 68 million in the same period last year, mainly due to the increase in the number of PPP projects undertaken by the company and the increase in foreign investment by subsidiary PPP project subsidiaries.
Conclusion:
During the reporting period, the company significantly improved the billing speed through financing convenience and brand advantages during the IPO inertia period, with 2017 and 2018H1 accumulating newly signed orders as high as 5.1 times the corresponding period income ratio, of which since listing began to undertake 2.81 billion PPP projects, it is expected that the project will continue to release performance and accelerate the company's transformation. Abundant orders promote the rapid growth of core business, construction and greening maintenance revenue increased by 53%, landscape design business increased by 114%, overall revenue increased by 55%, and home net profit increased by 64%. The increase in gross profit of PPP business also increases the financial pressure, superimposing the adjustment of accounting subjects, resulting in a steady increase in the overall profit level, an increase in investment cash outflow, a decline in the cash ratio of receipts and payments compared with the same period last year, and operating cash flow remains stable. We believe that the current performance of the company is highly flexible, and the abundance of on-hand orders is expected to promote rapid growth in the next three years. It is estimated that the company's operating income from 2018 to 2020 is 1.275 billion yuan, 1.85 billion yuan and 2.409 billion yuan respectively, and the earnings per share are 0.67,0.90 and 1.1yuan respectively, corresponding to the PE of 17.1x, 12.8X and 10.5x respectively.
Risk tips: fluctuation risk, financial risk and market competition risk of infrastructure and real estate investment
