Main points of investment:
Event: the company released its annual report for 2018, with annual revenue of 953 million, an increase of 66.47%, a net profit of 55 million, an increase of 124.39%, and a deduction of 21 million, an increase of 204.45%.
Q4 performance broke out, with a gratifying growth rate for the whole year. Q4 revenue 438 million (+ 181%), homing mother 41 million (104x increase), net interest rate 15.12%, same increase 14.1pp, ring increase 14.5ppm; annual revenue / homing increased 66.47% (+ 115pp) / 124.39% (+ 141pp) respectively. The driving factors include a substantial increase in construction orders, an increase in the proportion of relatively high-profit municipal projects, the gradual release of the output value of major projects, focusing on high-quality projects and strict cost control, recovery of development rights and compensation of 130 million profits, etc.
The gross profit margin / rate decreased simultaneously, and the decrease in impairment / the increase in net non-operating income led to a substantial increase in net interest rate. The cash-to-cash ratio fell sharply, and cash flow worsened compared with the same period last year. The debt ratio rose 1.3pp. The gross margin is 16.88% (- 8pp), which is the difference between the construction and futures business; the sales / management / financial / period rate is 11.42% (- 9.1pp)
/ 5.55% (- 2.3pp) /-4.44% (+ 4.1pp) / 12.53% (- 7.4pp), the period fee is only 4.7% higher than that of the period fee; the impairment is the same as the decrease of 34 million, which is the sign of the impairment of the development cost after the resumption of the development right, which eliminates the provision for the reduction of the original inventory; the non-operating income is 12.06 million (increased by 2.4x), which is the profit generated by the recovery of the development right; the tax rate is 9.11% (- 14.3pp). Net interest rate 8.44% (+ 3.4pp); cash-to-cash ratio 68.74% (- 79pp) / 45.57% (- 35pp), cash flow from operations-154 million, worsening from 113 million last year, due to increased net margin outflow from futures trading and decrease in cash from construction sales and labor services; debt ratio 75.24% (+ 1.3pp)
Enjoy the advantages of shareholders, seize the major opportunities such as the construction of airport new towns and talent apartments in high-tech zones, actively transform municipal / EPC/PPP, and grow together with Chengdu and high-tech zones. With the rapid growth of construction revenue and abundant orders, the highly flexible performance is expected to enter a period of golden growth. Chengdu is located in the western center and international hub, and the airport new city is planned to be about 730000 mu. It is highly expected that Chengdu will be rebuilt into an industrial new city. In 2019, a large number of infrastructure, municipal public utilities, shed reform and other major projects will start construction. The company is the only state-owned listed company / construction enterprise under the management committee of the high-tech zone, and the majority shareholder Hi-tech Investment Group (wholly owned by the District Finance Bureau) holds a stake of 45.4%, actively transforming and expanding the municipal / talent apartment project by virtue of shareholder advantages and dual first-class qualifications. The bid for the whole year was 2.52 billion, of which the housing construction was 1.715 billion (+ 135%), the corresponding income was 791 million (+ 2160%), and the corresponding income was 3 times. Currently, the signed unfinished order is 4.434 billion, corresponding to 5.5 times of the annual construction revenue, an increase of 293% over the end of 2017. The annual construction income is 800 million, accounting for 84% (+ 14pp), accounting for 84% (+ 14pp), and the gross profit margin is 6.62% (+ 2.6pp), of which the housing construction / municipal income is 468 million (+ 56%) / 263 million (+ 255%) respectively. The future income is expected to continue to grow at a high level.
Profit forecast and investment rating: from 2019 to 2021, the company's operating income is expected to be 1.6 billion yuan, 2.486 billion yuan and 3.547 billion yuan respectively; the net profit is 87 million yuan, 124 million yuan and 164 million yuan respectively; the EPS is 0.28,0.4 yuan and 0.53 yuan respectively, and the corresponding PE is 40.9x, 28.8X and 21.7x respectively. Cover for the first time, giving a "neutral" rating.
Risk tips: 1, the construction of the new area is not as expected; 2, market competition risk; 3, financial risk.