This report is read as follows:
Revenue goes down under tight credit and the increase in financial expenses-management expenses leads to a negative increase in performance. The company's proposed introduction of state-owned holdings will significantly improve financing capacity and business development ability, superimposed on sufficient orders 2019 performance or stabilize and pick up.
Main points of investment:
Maintain and increase holdings. 2018 performance KuaiBao: revenue 3.55 billion (- 9%) / net profit 370 million (- 39%) lower than expected, taking into account the garden PPP from high-speed expansion to a stable phase, downgrade 2018-2020 EPS to 0.26 EPS 0.34 pounds 0.40 yuan (formerly 0.63 pounds 0.89 pounds 1.17 yuan), a growth rate of-39 pounds 34 pounds 17%. Consider the company's leading position to give slightly more than 17 times the industry average PE, reduce the target price to 5.8yuan (the original 11.0yuan), increase holdings.
2018H2 revenue / return net profit continued to be a negative drag on full-year results, mainly due to tighter financing / increased fees. 1) in 2018, the revenue of Q1-Q4 (diluted) decreased by 10.16%, 8.87pct decreased by 10.16%, 5.18pct decreased by 10.16%, and the net profit of home decreased by 10.16%, respectively. 3) reasons for negative performance growth: ① PPP policy consolidation company project construction slowdown confirmed lower output value; ② tight credit financing costs increased due to an increase in financial expenses (+ 52% in the first three quarters of 2018); ③ staff growth in 2017 led to an increase in management expenses in 2018 (+ 25% in the first three quarters of 2018).
It is proposed that after the introduction of state-owned assets holding, the ability to expand business and financing capacity will be stronger, and 2019 of the performance may stabilize and pick up. 1) in September / November 2018, the controlling shareholder signed an agreement with Weifang City Investment / Weifang City Investment & Zhucheng Investment to transfer 10 / 16% of the shares (price 6.2Unix 5.1 yuan). After the completion of the transaction, 21.46% of Weifang City shares as the controlling shareholder is conducive to improving the company's financing capacity and business development ability. 2) the new contract signed in 2018 is 2.174 billion, and the new contract signed by Q2-Q4 is 2.057 billion /-53% or because the company is more prudent in accepting engineering orders. At the end of 2018, the unfinished order has been signed by 8.062 billion / the revenue ratio of the existing order is 2.3times; 3) it is announced in December 2018 that it intends to buy back RMB 1.5-300 million / the maximum unit price is RMB 6.50, and now it has bought back RMB 39 million / average price 3.92RMB.
Catalyst: social finance data continued to improve, PPP storage and landing continued to rise, performance growth rebounded.
Risk tips: the growth rate of social finance has declined sharply, policies continue to rectify PPP, policies limit local debt, and so on.
