The company recently announced its 2018 results forecast that the expansion of construction business and high government compensation have led to a substantial increase in the company's profits, and the estimated return net profit has been raised to 5000-60 million, an increase of 104.94% 145.93% over the same period last year. In addition, the company issued an announcement on the operation of the fourth quarter, with a newly signed order of 310 million yuan.
The profit of construction business has increased, and the performance has been greatly improved by government compensation.
The company expects to achieve a net profit of 5000-60 million yuan in 2018, an increase of 104.94% 145.93% over the same period last year. There are two main reasons for the performance growth. On the one hand, the company seized the huge opportunity of the construction of Chengdu Airport New City, resulting in a substantial increase in construction business profits; on the other hand, during the reporting period, the Yucheng District Government of Ya'an City withdrew the development rights of Sichuan Yaan Hot Spring Tourism Development Co., Ltd., a subsidiary of the company, and gave it about 130 million compensation in Ya'an Zhougongshan Hot Spring Development Zone, which correspondingly increased its net profit by about 21 million yuan. After deducting the non-recurring profit and loss, the company expects to deduct non-return net profit of 29 million-39 million in 2018, which is still a substantial increase of 328.78% and 476.63% over the same period last year, and its performance is significantly higher than that in 2017.
There are plenty of orders on hand, and the number of orders is expected to continue to grow in the future.
In the fourth quarter of 2018, the company signed 310 million yuan of new orders, 2.65 billion yuan of new orders for the whole year, and 3.698 billion yuan of existing orders for the whole year, an increase of 223.8 percent over the same period last year. With the landing of the PPP project in Chengdu Airport Metro, the company may continue to participate in the construction of the high-tech zone in the future, and its order advantage in the high-tech zone is more significant. Since 2019, the company has successively won the bid for construction general contracting projects in the western park and Zhonghe area, with the project amount of 359 million yuan and 175 million yuan respectively, accounting for 62.65% and 30.72% of the 2017 revenue. At present, the company has sufficient orders on hand, the newly signed orders are growing steadily, and the order carry-over revenue is expected to accelerate in the future, which is expected to have a positive impact on the company's operating performance in 2019 and future years.
The company's business expansion advantage is enhanced, and it continues to benefit from the development dividend of Chengdu High-tech Zone.
Recently, Chengdu High-tech Zone has issued relevant plans, planning to build a new pattern of modern service industry with "one corridor, two cores and multiple points" in the next five years, speed up the integrated development of manufacturing and service industries, speed up the construction of basic public service facilities, implement the concept of park city construction, and enhance the ability of comprehensive utilization of space. As the only state-owned listed company under the Management Committee of Chengdu High-tech Zone, the company has deeply participated in the construction of Chengdu High-tech Zone, or will benefit from the development of Chengdu High-tech Zone, gain more opportunities in the future, open up a broader space for development, and improve the company's performance.
Investment suggestion
In 2018, the company fully seized the development opportunities, business scale development and government compensation brought about a substantial increase in profits, excluding the impact of non-recurrent profits and losses, deducting non-return net profit growth rate is still significant. Under the background of accelerating the construction of high-tech zones, the company will expand its business areas and enhance its competitive advantage, and newly signed orders are expected to grow rapidly. in the future, with the gradual arrival of orders, the company's performance may maintain high-speed growth. Accordingly, we raised the company's future profit forecast from 0.48,0.95 and 180 million yuan to 0.55,1.06 and 192 million yuan from 2018 to 2020, an increase of 125%, 92% and 82% over the same period last year. Corresponding to the 2018-2020 EPS of 0.18,0.34,0.62 and 53,27,15 times respectively, it was upgraded to the "Buy" rating.
Risk hint: the growth rate of fixed asset investment is declining rapidly, and business development is not as expected.
