Deducting high growth of non-performance, steady growth of main business
In 2018, the company achieved revenue of 5.225 billion, an increase of 24.43% over the same period last year, and a net profit of 212 million, an increase of 5.73% over the same period last year, deducting an increase of 80.41%. Among them, the revenue of the main business project contracting reached 3.655 billion, an increase of 36.11% over the same period last year, and that of the engineering consulting business was 1.533 billion, an increase of 2.71% over the same period last year. New orders were signed for the whole year 5.852 billion, an increase of-0.02% over the same period last year, and existing orders reached 7.556 billion by the end of the first quarter of 2019.
Gross profit margin rises and cash flow declines
The company's ROE in 2018 was 15.43%, down 0.77pct from the same period last year. The gross profit margin was 11.50%, up 0.25pct from the same period last year; the net profit margin was 4.06%, down 0.72pct from the same period last year. During the period, the expense rate was 6.61%, an increase of 0.85 pct over the same period last year, in which the management expense rate increased from 1.46pct to 6.87%, the financial expense rate decreased by 0.55pct to-0.47%, and the sales expense rate decreased by 0.05pct to 0.22%. The turnover rate of total assets was 1.27 times, up 16.51% from the same period last year, the turnover rate of accounts receivable was 7.08 times, down 6.35% from the same period last year, and the asset-liability ratio was 66.70%, which increased 0.23pct over the same period last year, and the solvency remained stable. Achieve operating net cash flow of-29 million, operating net cash flow / operating income of-0.55%, a decrease of 0.65pct compared with the same period last year.
Q4 revenue growth accelerates
The company's 2018Q1, Q2, Q3 and Q4 completed revenue of 957 million, 1.102 billion, 1.136 billion and 2.031 billion respectively, an increase of-3.18%, 20.92%, 36.19% and 38.55%, respectively, and net profit of 42 million, 55 million, 51 million and 64 million, an increase of-2.62%, 24.51%, 52.79% and-19.90%, respectively. The company's revenue growth accelerated in the fourth quarter.
Strong overseas business growth is expected to benefit from the reform of state-owned enterprises
During the reporting period, the company's overseas market development progressed steadily, and projects in hand, such as the United Arab Emirates, progressed smoothly. Overseas business achieved revenue of 1.406 billion, a substantial increase of 136.20% over the same period last year, and its share in total revenue increased to 14.18%. In 2017, the company's controlling shareholder, China Light Industry Group, was integrated into Poly Group as a whole, completing the major integration of central enterprises. Poly Group has recently been included in the list of "two hundred enterprises" in the state reform, and new progress is expected to be made in the future mixed reform of state-owned enterprises and equity diversification reform.
Profit forecast and investment advice: it is estimated that the EPS of the company in 19-21 is 0.63Universe 0.76Universe 0.91 yuan, and the PE is respectively 20.4Universe 16.9Compact 14.1 times. Maintain a "buy" rating.
Risk tips: bad accounts receivable, slow investment in fixed assets, lower order conversion rate than expected, etc.
