The company recently announced that the consortium involved in Chengdu Tianfu International Airport New City Jiangxi South and North Group Urban Road and Landscape improvement Project PPP project, the total investment of the project is estimated to be about 6.4 billion, and the project has been included in the PPP management database of the Ministry of Finance. In addition, Chengdu Beit Construction and installation Engineering Co., Ltd. (hereinafter referred to as "Beit Jian'an"), a subsidiary of the company, recently received the bid winning notice for the first section of the survey-design-construction general contract for the rental housing construction project (phase I) of Chengdu Tianfu International Airport. Our comments are as follows:
The company will pick up the airport new city project again, and the cooperation with Chinese construction is expected to play an exemplary role.
The pre-winning project of the consortium of the company is located in Chengdu Tianfu International Airport New City, which is an important strategic deployment in Sichuan Province and Chengdu. The planned construction period of this project is no more than 2 years and the operation period is 15 years. China Construction is the leader of the consortium and the general contractor. The company's subsidiary Bite Investment Holdings contributes to the project as the PPP fund initiated by the fund manager, Beit develops as the operating unit, and the company's subsidiary Bite Jian'an will subcontract part of the construction business from China Construction. The company's participation in the consortium pre-bid project and the subsidiary Beit Jianan bid-winning project show that the company is gradually involved in the construction of the airport new area, and the investment income and construction profits will be further improved. the cooperation with China Construction is expected to serve as a demonstration guide for the project model.
The company is deeply involved in the construction of the airport new city, and orders are expected to continue to grow in the medium term.
Under the background that the central government strengthens the "complement board" of infrastructure construction, the capital construction investment in the western region is expected to maintain steady growth, and the infrastructure investment in Sichuan is also in a state of steady growth. The construction of the airport new city in Chengdu is of great significance to Chengdu. According to the requirements of the management committee of the high-tech zone, the company, as the only state-owned listed company under the management committee, should fully and deeply participate in the construction of the airport new city, especially in infrastructure and other construction PPP projects.
The pre-winning bid of the consortium participated by the company directly reflects the important position of the company in the field of airport Metro infrastructure, and it may be the first order for the company to land after the establishment of the PPP fund. It is expected that in the future, with the continuous progress of the construction of the airport Metro, there may be more cooperation funds with central enterprises and state-owned enterprises, accompanied by the landing of more related orders.
The company's performance in 2018 has ushered in an inflection point, and the company's future performance will be better guaranteed under the increase in order growth. In the 2018 semi-annual report, revenue in the first half of the year reached 407 million yuan, an increase of 23.87% over the same period last year. The net profit of returning home decreased by 20.56% over the same period last year, mainly due to the liquidation of Chengdu Pante Industrial Co., Ltd., a foreign investment unit in the same period last year, which belongs to non-recurrent profit and loss. If you consider deducting non-homed net profit, the growth rate will increase by 417.47% compared with the same period last year, and the growth rate of performance release will continue to maintain a high level in the second half of the year with the gradual landing of existing orders.
Investment suggestion
The company is the only state-owned listed company under the Management Committee of Chengdu High-tech Zone, which has incomparable advantages over other construction enterprises. The company will deeply participate in the construction of the airport new city and enjoy the policy dividend, and the growth rate of the company's construction business will increase significantly from 2018 to 2019. With the start of the project in the second half of the year, the output value will be further released, and performance growth is expected to continue to accelerate. We maintain the company's EPS of 0.15,0.30,0.58 from 2018 to 2020, the corresponding PE is 56,28,15 times, and maintain the "overweight" rating.
Risk hint: the growth rate of China's fixed asset investment is declining rapidly, the business development is not as expected, and the pre-winning project cannot win the bid due to other unexpected reasons.