Q4 income performance growth rate both improved, profit level improved
According to the 2018 annual report, the company achieved an operating income of 3.672 billion yuan in 2018, an increase of 12.59% over the same period last year, and a net profit of 453 million yuan, an increase of 21.95% over the same period last year. On a quarter-by-quarter basis, the company's Q1-Q4 achieved revenue of 5.7%, 6.9%, 6.8%, 1.74 billion yuan respectively, with an increase of 38%, 20%, 3%, 10%, 0.7%, 0.9, and 0.5 billion yuan, respectively, and an increase of 7%, 11%, 28%, 51%, 51%, respectively, compared with Q3. The company's 18-year gross profit margin / net profit margin was 15.0% / 12.6% respectively, which was 2.4 pct higher than that of 17 years, and its profitability was significantly higher than last year. The company's construction business income increased by 15.6%, while asphalt concrete business income decreased by 43.4%, but benefited from the increase in the unit price of asphalt concrete and related products over the same period last year, and the gross profit margin increased 6.0pct compared with the same period last year.
The low asset-liability ratio and sufficient cash on hand will help to cultivate new profit growth points.
The company's current asset-liability ratio is 48.8%. In recent years, the debt ratio has been about 50%, which is much lower than that of other construction enterprises. At present, the company is also actively taking measures to optimize the investment and financing structure and improve the turnover efficiency of project funds. in March 18, the company issued corporate bonds with a coupon rate of 5.57% and raised 400 million yuan for project investment and construction and supplementary operating funds. In addition, the company currently has about 2.1 billion yuan in cash on hand. The company has sufficient capital, low debt ratio and good financial risk control, which is helpful for the company to grasp investment opportunities and cultivate new profit growth points in the future.
The high increase in orders for infrastructure / housing construction will benefit from the acceleration of the integration of the Yangtze River Delta
According to the company's operating data announcement, the company signed new orders of 6.52 billion yuan in 18 years, an increase of 4.8% over the same period last year. Among them, orders for infrastructure / housing construction increased by 59.4% and 92.2% respectively compared with the same period last year. At present, the company's on-hand order income ratio is about 1.8 times, and the on-hand order is sufficient to support the company's future revenue growth and gradually translate into the company's performance. The company is the infrastructure investment platform of Pudong Development Group, based on the Pudong New area of Shanghai, facing the economically developed areas of the Yangtze River Delta. With the continuous promotion of the integration of the Yangtze River Delta, the investment and construction in the Yangtze River Delta is expected to accelerate, and the company as a local construction enterprise in the Yangtze River Delta is expected to benefit.
Profit Forecast and Investment rating
The company is the infrastructure investment platform of Pudong Development Group, based on the Pudong New area of Shanghai, facing the economically developed areas of the Yangtze River Delta. With the continuous promotion of the integration of the Yangtze River Delta, the investment and construction in the Yangtze River Delta is expected to accelerate, and the company as a local construction enterprise in the Yangtze River Delta is expected to benefit. It is estimated that the company will achieve a net profit of 5.30 RMB 609 million RMB respectively in 19-21 years. At present, the company's PE (TTM) is 14.7 times, while the average PE (TTM) of other state-owned construction enterprises in A shares is about 14.5 times, and the company's valuation is basically equal to the industry average valuation. We predict that the company's 19-year EPS will be 0.55 yuan per share, which will give the company 14.5 times the industry average PE valuation in 19 years, and maintain the "overweight" rating corresponding to the reasonable value of about 7.9 yuan per share.
Risk hint: the growth rate of infrastructure investment continues to decline, the company's newly signed orders increase and decline, and the integration of the Yangtze River Delta is not as fast as expected.
