Events:
Mindong Construction Engineering, a subsidiary of the company, won the bid for the national demonstration high school and international school construction project (Phase I) in the overseas Chinese Experimental Zone on March 21, 2019, with a total bid amount of 491 million yuan and a construction period of 2 years.
Comments:
Winning major projects will have a positive impact on future performance:
The winning project of the company is a civil construction project, which indicates that the company has made great progress in expanding the upper and lower reaches of the decoration industry chain. at the same time, it plays a good role in promoting the follow-up decoration engineering orders. it will have a positive impact on the company's future performance. In addition to this project, since the first quarter of 2019, the company has successively won the bid for the theme packaging project in Wanda Baby King Paradise and the early classroom theme packaging project (winning bid amount of 126 million yuan), and the professional contracting project of fine decoration of Weipin Hui Pazhou headquarters Building (winning bid amount of 94 million yuan). The newly signed project orders are significantly faster than in the fourth quarter of 2018.
Order growth slowed in the fourth quarter of 2018, with more orders on hand:
According to the company's operating report for the fourth quarter of 2018, the company signed new engineering orders of 418 million yuan in the fourth quarter of 2018, a drop of 62.34% compared with 1.11 billion yuan in the same period in 2017. among them, the official clothing business order was 231 million yuan, compared with 759 million yuan in the same period in 2017, down 69.57% from the same period in 2017; residential decoration orders were 179 million yuan, compared with 332 million yuan in the same period in 2017, down 46.08% from the same period in 2017. At the same time, by the end of 2018, the company has signed orders for unfinished projects totaling 2.481 billion yuan, which is 1.05 times the revenue of 2018.
Actively forge ahead and speed up the layout of key areas and market segments:
The company closely follows the general trend of national policies such as Belt and Road Initiative, Guangdong-Hong Kong-Macau Greater Bay Area and the integration of Beijing, Tianjin and Hebei, strengthens the operating strength of key areas, strives to cultivate superior regional markets, and increases the layout of overseas markets, successively investing in Macao, Hong Kong and Vietnam subsidiaries. at present, it has obtained certain business undertaking capacity and business opportunities in overseas areas. In terms of the layout of emerging business, the company actively develops the long-term rental apartment project with policy tuyere, and cooperates with Xi'an property Market Tong, Shenzhen and Zhi Asset. And speed up the market segmentation layout, focusing on the cultural exhibition Chen, high-end hotels, long-rent apartments, administrative office and other areas to establish a professional business department, to create a leading edge in the field of segmentation.
Financial forecasts and valuations:
It is estimated that the company's home net profit from 2018 to 2020 will be 23.69 million yuan, an increase of 21.0 percent, 22.9 percent, 24.1 percent, and an EPS of 0.33, 0.47, 0.61 yuan. The current stock price corresponds to the PE of 34.4, 24.2 and 18.7 times from 2018 to 2020. Taking into account the sound operation of the company, the remarkable results of industrial chain and business expansion, the "recommended" rating is maintained.
Risk tips: real estate sales decline, business expansion is not as expected.