What happened: the company recently released the 2018 mid-term report, the company's revenue in the first half of the year was 991 million yuan, an increase of 13.98% over the same period last year, the main business profit was 234 million yuan, an increase of 4.76% over the same period last year, and the net profit attributed to the parent company was 45.39 million yuan, an increase of 30.96% over the same period last year. In the first half of the year, the company realized EPS of 2 cents.
Comments:
Revenue, profit, deducting non-profit growth and operating net cash are negative: the company's profit and loss after deducting non-recurring in the first half of the year was 44.34 million yuan, an increase of 13.14% over the same period last year, and has increased by more than 13% for two consecutive years. The net cash generated by the company's operating activities was-28.44 million yuan, which was the same as at the end of last year and 48.27 million yuan in the same period last year. We judge that this may be due to the company's large investment and slow payback at the initial stage of expanding the market. At present, the company's debt ratio has risen to more than 40%, but overall profitability has bottomed out.
Set up an agricultural research institute to set up a technical research team: centering on the weak links of the company's agricultural production and industrial development, the company strengthens its technical cooperation with scientific research institutes and colleges and universities, and carries out technical research projects item by item. form more scientific and standardized technical regulations for leading crops, and promote agricultural quality improvement and efficiency with technological progress. The second is cooperation and joint development. The company signed a "Strategic Cooperation Framework Agreement" with Gansu Academy of Agricultural Sciences to jointly build a first-class modern agricultural demonstration base in the province and even the whole country, enhance the ability of agricultural science and technology support and achievement transformation, and solve the scientific and technological bottlenecks and technical problems existing in production. The third is to establish a demonstration base for scientific and technological innovation. Lease green space facilities assets, build the technological innovation demonstration base of the Agricultural Research Institute in Yuzhong, incubate batch technological innovation achievements, test and demonstrate key areas and key links of technological integration innovation. The fourth is to jointly hire external experts to test and demonstrate.
Expand unified operation scale order agriculture + channel + team: since the beginning of this year, the company has made every effort to promote unified management and speed up the transformation of agricultural management mode. First, policy guidance. Guided by business objectives and through enhanced assessment, all branches should be guided to speed up the transformation of agricultural management mode from household farm contract management to unified management mode; all branches should study and formulate management incentive policies for unified management of land and products, vigorously promote the unified management of "land, agricultural materials, and agricultural products", and give full play to the benefits of unified management. The second is order radiation. Subsidiaries actively play the leading role of industrialization leading companies, vigorously develop order agriculture, expand the scale of base construction; branch companies dock customers in many ways, implement orders through multiple channels, and expand the scope of unified management. Third, the project team promotes. By setting up a special project team, each branch (sub) company promotes the professional operation of directly operated projects and prepares for large-scale operation.
The company's future performance is flexible. Although the company has encountered many difficulties in recent years, the company's layout in hops, fruits, alfalfa and potatoes will blossom and bear fruit in the next few years, coupled with the large price fluctuations of these cash crops, there will be greater downward pressure. However, with the continuous optimization of the company's industrial structure and the improvement of the industrial level, the continuous improvement of internal management, the acceleration of market construction, and the improvement of anti-risk ability. Especially in the context of public inflation, both performance improvement and market opportunities will be greatly improved.
Earnings forecast and investment rating: we expect the company's earnings per share from 2018 to 2020 to be 0.11, 0.12, 0.13 yuan respectively. It is predicted that the PE in the next three years will be multiple of that in 27-26-24. Taking into account the company's good industrial foundation, reasonable layout, broad sales prospects and great potential, we maintain the "overweight" rating of the company.
Risk factors: Meteorological disasters, adverse changes in relevant national agricultural policies, adverse changes in market prices, etc.