Event: the company released its 2018 annual report, with annual revenue of 3.672 billion, an increase of 12.59%, a net profit of 6.372 billion, an increase of 5.12%, and a deduction of 361 million, an increase of 14.91%.
Q4 indicators are brighter than expected, driving orders and performance for the whole year. The company expects revenue to increase by 65% to 6 billion in 2019, and is very confident about its future operations. Q4 revenue / return to mother / deduction increased by 10.16%, 54.74%, 72.13%, respectively, with a significant increase in 13pp/78pp/112pp compared with the previous year, and a year-on-year change in-10pp/38.3pp/69pp, resulting in a higher-than-expected performance, which is determined by an increase in the workload of projects under construction. Gross profit margin 21.15% increases 6.8pp, ring increases 11pp, period fee 1.17% decreases 1.6pp, ring decreases 5.6pp, investment income 61.5 million increases 52%, accounting for 25% of net profit, tax rate 19.34% decreases 4.5pp, net profit increases 3.8 ppm substantially; newly signed orders 3.4 billion, same increase 68%, growth rate increases 141pp compared with the previous year, driving new contract signing 6.5 billion to a new high and 10% increase for the whole year. The annual growth rate of revenue / homing is 12.59% and 21.95%, with a year-on-year change of-16pppppppp. the company expects revenue of 6.038 billion in 2019, corresponding to an increase of 65% over the same period last year, demonstrating operational ambition.
The gross profit margin / period rate / net interest rate increases simultaneously, the cash flow worsens as a result of business expansion, and the debt ratio is at a low level. During the reporting period, the gross profit margin was 15%, with an increase of 2.4%; the sales / management / financial rates were 0.16%, 6.45% and 0.37%, respectively, and the year-on-year changes were-0.1pp/2.4pp/-0.1pp; the period fee increased by 72%, and the rate by 5.68%; the investment income increased by 11%, accounting for 49% of net profit; the tax rate was 18%, and the net interest rate was 12.57%, up 0.6%. Receipts and payments are higher and lower than this and the other, respectively-3.6pp/16.8pp, operating cash flow-23 million, which is a sharp drop from 353 million last year, which is due to an increase in cash paid by business expansion; the debt ratio at the end of the period is only 48.8%. As of the end of Q3, the debt ratio of the company is lower than the average value of infrastructure companies by 16pp, and there is enough room to increase investment business in the future.
Deep ploughing Shanghai to expand the Yangtze River Delta, the main business steady growth. Actively transform the investment and financing operators, the project is located in developed areas, the income is stable. The company's pavement construction technology is in the lead in China, with construction and municipal construction general contract first-class qualifications, rooted in Shanghai facing the Yangtze River Delta, contracted the construction of a large number of roads and road network projects in the region, will continue to benefit the integration of the Yangtze River Delta construction. During the reporting period, the company's revenue in Shanghai increased by 16%, the proportion increased from 2pp to 87%, gross profit margin increased by 14.62%, with an increase of 1.1 pp. road and bridge construction maintained its main business status, with revenue of 3.512 billion, accounting for about 97%, with an increase of 15.6%, gross profit margin of 14.16% and 1.7pp. The company has actively transformed into investment and financing operators, with a cumulative investment scale of more than 30 billion, infrastructure investment projects on hand are mainly concentrated in the Yangtze River Delta, and the source of project income is stable.
It was announced in March that it intends to invest 400 million yuan in the Pudong Science and Technology Fund, which will help the company integrate into regional development and tap more business and investment opportunities without affecting the company's operation and financial situation.
Profit forecast and investment rating: the company's operating income from 2019 to 2021 is expected to be 5.055 billion yuan, 6.409 billion yuan and 7.858 billion yuan respectively; the net profit returned to the parent is 534 million yuan, 604 million yuan and 681 million yuan respectively; the EPS is 0.55,0.62 yuan and 0.70 yuan respectively, and the corresponding PE is 16.2x, 14.3x and 12.7x respectively. Cover for the first time and give a "recommended" rating.
Risk tips: 1, infrastructure investment is not as expected; 2, market competition risk; 3, material price risk.
