Performance growth has been solid and cash flow has improved significantly:
The company has rich experience in projects, strong construction strength, and sustained and steady growth in performance. By the third quarter of 2018, revenue reached 1.737 billion yuan, an increase of 27.17% over the same period last year, and net profit reached 749.62 billion yuan, an increase of 29.99% over the same period last year. The company strives to improve the efficiency and quality of project management, strengthen business development, and will continue to maintain stable growth in the future. The company's net operating cash flow was 30.1655 million yuan, an increase of 113.14% over the same period last year. The sharp improvement in operating cash flow was mainly due to the strengthening of project payback efforts by the company. Net investment cash flow-867.817 billion yuan, an increase of 19.09% over the same period last year, mainly affected by investment in subsidiaries. The net cash flow of fund-raising was 34.6066 million yuan, an increase of 90% over the same period last year, mainly due to the funds raised by the company's public offering of shares in 2017.
Strengthen the layout of key regions, emerging businesses and market segments:
The company strengthens the layout of key regions, around the general trend of national policies such as Belt and Road Initiative, Guangdong-Hong Kong-Macau Greater Bay Area and the integration of Beijing, Tianjin and Hebei, strengthens the operating strength of key areas, strives to cultivate superior regional markets, and increases the layout of overseas markets. it has successively invested in Macao, Hong Kong and Vietnam subsidiaries, and has achieved certain business undertaking capacity and business opportunities in overseas regions. In terms of the layout of emerging business, the company actively develops the long-term rental apartment project with policy tuyere, and cooperates with Xi'an property Market Tong, Shenzhen and Zhi Asset. At the same time, actively set foot in PPP, EPC and other new engineering models to open the channel of industrial integration. And speed up the market segmentation layout, focusing on the cultural exhibition Chen, high-end hotels, long-rent apartments, administrative office and other areas to establish a professional business department, to create a leading edge in the field of segmentation.
The proportion of residential fine decoration has increased, and adhere to the development ideas of key customers:
The growth rate of the company's residential fine decoration business has accelerated in recent years, and the business structure continues to tilt to the residential fine decoration business. From the revenue side, the proportion of the company's residential decoration business has been increasing, from 11% in 2014 to 36% in 2017; from the newly signed orders, the proportion of newly signed residential decoration orders has increased significantly since the second quarter of 2018. The company adheres to the development idea of "big platform, big customers", continues to develop and maintain key customers, and has established long-term partnerships with China Resources, Wanda Group, Pengrui Real Estate, Hanjing Group, China Shipping Real Estate, Sunac China and other well-known real estate enterprises. in the future, it is expected to continue to benefit from the dividend of the increase in the proportion of residential decoration.
There are enough orders on hand, and the structure is constantly optimized:
The company's newly signed orders totaled 1.998 billion yuan as of the third quarter of 2018, up 7.07% from the same period last year.
The company's decoration and construction business order structure continues to adjust, the proportion of newly signed orders for residential fine decoration continues to increase in the second and third quarters of 2018, and the business structure continues to tilt to residential fine decoration. In addition, the design business with higher gross profit margin signed 43 million yuan in the first three quarters, exceeding the level of the whole of last year, which is conducive to the improvement of the company's overall gross profit margin. As of the third quarter of 2018, the company has signed unfinished orders totaling 2.656 billion yuan, and sufficient orders on hand provide a guarantee for the steady growth of future performance.
Financial forecasts and valuations:
From 2018 to 2020, we estimate that the company will achieve an operating income of 24.02 million yuan, an increase of 22.7 percent, 23.4 percent, 24.3 percent, and a year-on-year growth of 25.1 percent, 20.7 percent, 20.4 percent, and 0.47, 0.57, 0.69 yuan, respectively, to realize a net profit of 0.99 percent, 143 million yuan and 20.4 percent, respectively. The current stock price corresponds to 20.2 PE 16.8 Universe 13.9 times from 2018 to 2020. Considering the sound operation of the company's public dress business, the residential fine decoration business may fully benefit from the dividend of the increase in the proportion of residential fine decoration, the performance is expected to grow steadily, and the "recommended" rating is maintained.
Risk tips: investment in fixed assets is declining, real estate sales are not as expected, and the company's business payback is not as expected.