Event: the company achieved revenue of 2.828 billion yuan in the first half of 2018, an increase of 32.95% over the same period last year, and its net profit was 148 million yuan, up 100.47% over the same period last year.
Main points:
The double power of "design + general contracting" supports the better-than-expected growth of performance.
Benefiting from the full outbreak of the design and engineering general contract business, the company's performance growth exceeded expectations in the first half of the year. In terms of business, the company's design business benefited from internal plate integration and external mergers and acquisitions, achieving rapid growth. The revenue in the first half of the year was 1.668 billion yuan, an increase of 29.85% over the same period last year, and the growth rate was higher than that of the same period last year (28.48pct). 2018H1's general contracting business continued to expand rapidly, with revenue of 912 million yuan, an increase of 46.08% over the same period last year, and the proportion of total revenue increased by 2.9pct to 32.25% over the same period last year, accounting for more than 30% for the first time.
The engineering business affects the gross profit margin, and the scale effect promotes the continuous improvement of expense rate during the period.
The company recorded a gross profit margin of 23.53% in the first half of the year, down 1.52pct from the same period last year, mainly affected by the increase in the proportion of engineering business with low gross margin. From a business point of view, the gross profit margin of design / project contracting / engineering technical management was 34.80%, 2.07% and 26.42% respectively, an increase of-1.15pct/0.98pct/-1.88pct over the same period last year. Benefiting from the scale expansion, the company's period expense rate has continued to improve since 2016, with 2018H1 recording a period expense rate of 17.40%, a year-on-year decline in 1.51pct. Among them, the management expense rate directly benefits from the scale effect, and the 2018H1 significantly reduces the 1.47pct to 16.38% compared with the same period last year, while the financial cost is affected by the expansion of the engineering business and the increase in financing demand, which increases the 0.16pct to 0.02% compared with the same period last year.
The regional layout is complete and the business is in full bloom.
2018H1, the company's regional business in an all-round way, with the help of revenue mergers and acquisitions to achieve the continuous improvement of revenue growth outside the province, "Belt and Road Initiative" ride to achieve overseas revenue growth from negative to positive. The revenue of 2018H1's local / non-provincial / overseas business in Shanghai reached 1.180 billion yuan respectively, a year-on-year growth rate of 20.43%, 50.58% and 42.21% respectively.
The company's local business growth is steady, and as a Shanghai state-owned enterprise, it actively participates in local construction. Through its subordinate Yunzhu Company, it has successively participated in the Shanghai Urban Renewal and Metro superstructure Fund. 2018H1, the company to undertake the Expo Cultural Park, Shanghai Library, Pudong Football Stadium and other landmark projects, and announced plans to participate in the fund to participate in the construction of the four major brands in Shanghai, continue to cultivate the local market.
After the listing of the company, the growth of business outside the province continues to accelerate, and through the construction of branches and mergers and acquisitions, the market outside the province is advancing smoothly. In the first half of the year, the company established the South China Center and Xiongan Design Institute, participated in the control planning of Xiongdong area and the urban design of Xiongan high-speed railway area, and carried out preliminary communication and negotiations with design companies outside the province on mergers and acquisitions.
2018H1, the company has set the goal of expanding the "Belt and Road Initiative" market focusing on Vietnam and the Philippines, and the development of overseas markets has improved. In the first half of the year, the company signed 17 overseas projects such as Vietnam, Philippines and North Africa, and actively approached potential projects such as Princess Port of Malaysia, Manila City Renewal of the Philippines and Indonesia's new airport. In the first half of the year, the company also won the bid for foreign aid projects of the Ministry of Commerce in Myanmar, Samoa and Tunisia, creating an opportunity for the company to carry out design specialization and whole-process engineering consulting business in these areas in the future.
The growth rate of orders continued to increase, and the deficiency board of infrastructure plus the leading effect contributed to the release of performance in the second half of the year.
The growth rate of new orders signed by 2018H1 continues to increase, the recovery trend of design orders has been verified, and the number of engineering orders has also doubled. 2018H1, the company signed a new contract of 5.589 billion yuan, an increase of 39.79% over the same period last year. Of this total, the design consulting contract was 3.215 billion yuan, which increased by 15.20% year-on-year on the basis of doubling orders in the same period last year, and the design business was anchored for the better trend; the total contract was 2.374 billion yuan, an increase of 96.64% over the same period last year, which was 1.65 times the revenue of the engineering business in 2017. to lay the foundation for the release of the performance of the follow-up engineering side.
As a design leader, the company is expected to continue to grow at a high speed with the help of the policy of making up for deficiencies in infrastructure in the second half of the year. In the first half of the year, national infrastructure investment increased by 7.3% over the same period last year, 11.6 percentage points lower than the growth rate for the whole of 17 years. Under the general environment of tighter financing and a general slowdown in the landing of general contracting projects, the comparative advantage brought by the company's leading position is prominent. performance still achieved substantial growth. In the second half of the year, under the guidance of the infrastructure deficiency board, the financing side of the construction industry is likely to usher in marginal improvement, and the company's leading effect is expected to continue to drive the annual performance to achieve rapid growth.
Profit forecast and valuation
As the design leader of state-owned enterprises, the company actively develops the project general contracting market horizontally, realizes the layout of the whole industrial chain of "design + project", and vertically actively develops out-of-province and overseas business, and the regional layout is complete. diversified management is expected to lead to the full blossom of performance. Infrastructure investment is expected to recover in the second half of 2018, and the company's leading effect is expected to continue to drive high performance growth for the whole year. We predict that the company's EPS from 2018 to 2020 will be 0.86yuan / share, 1.088yuan / share and 1.27yuan / share, respectively, and the corresponding PE will be 15,12,10 times, which will be upgraded to the "buy" rating.
