The growth of the main business is accelerated and orders are abundant.
In 2018, the company achieved revenue of 5.959 billion, an increase of 12.65% over the same period last year; net profit reached 264 million, an increase of 2.78% over the same period last year. The lower growth rate of net profit was mainly due to the impairment of goodwill and the increase in R & D investment in intelligent buildings; the revenue of the main business engineering design was 3.777 billion, an increase of 14% over the same period last year, and the growth rate was 6.21pct higher than that in 2017. Newly signed orders for the whole year were 9.638 billion, an increase of 15.55 percent over the same period last year, of which design orders were 5.782 billion, an increase of 21.74 percent over the same period last year.
Profitability remains stable and cash flow maintains net inflows
The company's ROE in 2018 was 10.18%, down 2.30pct from the same period last year. The gross profit margin was 25.45%, down 0.08 pct from the same period last year; the net profit margin was 5.14%, down 0.42pct from the same period last year. During the period, the expense rate was 18.83%, an increase of 0.90pct over the same period last year, in which the management expense rate was increased from 0.69pct to 17.57%, the financial expense rate was increased by 0.16pct to-0.01%, and the sales expense rate was increased by 0.04pct to 1.26%. The total asset turnover rate was 0.75 times, down 12.79% from the same period last year, and the accounts receivable turnover rate was 3.57 times, down 11.41% from the same period last year. By the end of the first quarter of 2019, the company's asset-liability ratio was 64.49%, which was lower than that at the end of 2018 by 1.64pct, and its debt-paying ability had improved. Since the listing, the company's operating cash flow has maintained a net inflow. In 2018, the company achieved operating net cash flow of 338 million, operating net cash flow / operating income of 5.67%.
Q1 performance growth accelerates
The company's 2018Q2, Q3, Q4 and 2019Q1 completed revenue of 1.536 billion, 1.437 billion, 1.695 billion and 1.558 billion respectively, up 26.99%, 6.14%,-6.34% and 20.57% year-on-year, and realized net profit of 77 million, 60 million, 56 million and 82 million, up 199.56%,-14.15%,-50.61% and 15.01% respectively. The company's performance growth accelerated in the first quarter.
The national layout is beginning to bear fruit, and stock incentives help the growth.
During the reporting period, the company set up Xiongan Design Institute and South China Center, through the integration of regional market resources, build a regional center as a platform to build the whole process of the business chain of the localized development. Recently, the company awarded 341 employees a total of 12.9194 million restricted shares, accounting for 3 per cent of the total share capital, and set unlocking conditions of not less than 8 per cent of revenue CAGR in the next three years based on 2017, which is conducive to fully motivating employees.
Profit forecast and investment advice: it is estimated that the EPS of the company in 19-21 is 0.68max 0.77max 0.88 yuan, and the PE is 18.3max 16.1 times respectively. Maintain a "buy" rating.
Risk tips: bad debts of accounts receivable, slowdown of investment in fixed assets, impairment of goodwill, etc.