This report is read as follows:
The company is positioned as an one-stop service for domestic light industry and related industries, benefiting from the future synergy of the merger and reorganization of central enterprises, steady progress of emerging businesses such as environmental protection, and Belt and Road Initiative benefiting from overseas layout.
Main points of investment:
Increase your holdings cautiously. The company's 2018 net profit of about 210 million yuan (+ 5.7%) is slightly lower than expected, or it may be related to factors such as a larger decrease in non-operating income compared with the same period last year; 2019Q1 net profit is about 48 million yuan (+ 13%); considering the lower-than-expected order growth in 2018, we downgrade our forecast for 20119 / 20 EPS to 0.61 EPS 0.72 yuan (formerly 0.68 pm 0.79 yuan) growth rate of 2018%, and forecast EPS growth of 0.81 yuan in 2021. Taking into account the recent increase in risk appetite, construction valuation repair, and with reference to comparable companies in the same industry, give the company 23 times PE in 2019, raise the target price to 14.03 yuan, and maintain a cautious overweight rating.
2018Q4 growth declined, operating cash flow slightly under pressure. 1) the net profit of Q1-Q4 is 0.42 Q1-Q4 0.55 0.2pct 0.51 / 64 million RMB growth rate-3 Universe 25Universe 53 Universe 20% Magi Q4 decline or because 2017Q4 confirms that the non-operating income is relatively high (mainly for the recovery of Taiyuan heavy Industry creditor's rights of RMB 57 million); 2) the gross profit margin of 11.5% (+ 0.7pct) is basically stable, or the net profit rate is increased due to expense rate, etc. 3) the third rate is 6.6% (+ 0.9pct), of which the management expense rate is 6.9% (+ 1.5pct) due to the impact of employee compensation and equity incentive expenses; 4) the net operating cash flow is-28.83 million yuan (4.2 million yuan in the same period last year) due to the increase in operating receivables; 5) accounts receivable ratio of total assets is 18.8% (+ 1.8pct); asset-liability ratio is 66.7% (+ 0.2pct).
Environmental protection / overseas expansion is progressing steadily, and new orders signed by 2019Q1 are accelerated. 1) the company is positioned to provide full-process / omni-directional one-stop service for enterprises in light industry and related industries. the newly signed order of 5.85 billion yuan in 2018 is the same as that of the previous year, of which the project general contract is 3.54 billion yuan (- 2.6%) / design yuan 1.64 billion yuan (+ 11.9%). According to the industry, environmental protection 1.46 billion yuan (+ 49%) / food fermentation 960 million yuan (+ 118%) According to region, overseas 610 million yuan (+ 27%) / domestic 5.24 billion yuan (- 2.5%); 2) 2019Q1 newly signed order 2.01 billion yuan (+ 50%) accelerated; 3) China Light Group as a whole into Poly, Poly's main real estate development / international trade, etc., is a large central enterprise managed by the State-owned assets Supervision and Administration Commission of the State Council, the company will strengthen business coordination with Poly / medium Light to achieve mutual benefit and win-win results. 4) actively promote the international business platform, will benefit Belt and Road Initiative.
Catalysts: liquidity continued to be loose, state-owned enterprise reform to improve quality and efficiency, Belt and Road Initiative to promote speed, and so on.
Core risks: lower-than-expected order growth, liquidity contraction, overseas project risk, etc.
