The company undertakes the growth of business volume, and the "going out" strategy has made phased achievements.
Over the past 16 years, the company has undertaken 17.97 billion business, an increase of 69.47%, of which the housing construction business is 13.56 billion, an increase of 140.3%. In the past 16 years, the company has undertaken large-scale PPP and EPC projects such as Wenzhou Financial Technology Center, and the payback is expected to be good in the future. The company's main construction industry "going out" strategy has achieved phased results. In the past 16 years, the company's business in Zhejiang Province outside Ningbo is 3.97 billion, accounting for 22.1% of the total business, and 4.79 billion projects in Zhejiang Province, accounting for 26.7%.
Revenue rose slightly and gross profit margin decreased
The company's 16-year revenue was 13.7 billion, an increase of 3.16%, of which the housing construction business was 7.89 billion, down 2.07% from the same period last year. The revenue of municipal utility business / building decoration business / building materials sales business was 2.42 billion, respectively, with an increase of 11.6%, 30.2% and 19.0%, respectively. The three businesses played a certain role in hedging the decline in revenue from housing construction business. In addition, the company confirmed 2.813 million of revenue related to the PPP project in 16 years. After excluding the impact of business reform, the gross profit margin decreased by 0.59 percentage points. From the perspective of business segment gross profit margin, the gross profit margin of housing construction business fell by 2.41 percentage points, and the main reason for the decline was the significant increase in business subcontracting costs.
The rate of management expenses has increased, and the net cash flow of operating activities has increased.
The company's 16-year expense rate was 3.86%, an increase of 0.39% over 15 years, of which the management expense rate increased by 0.27%; the financial expense rate and sales expense rate remained basically unchanged. The main reason for the increase in the rate of management expenses is the rapid increase in labor costs in the housing construction business. The loss of impairment of assets decreased by 66.4% compared with the same period last year, mainly due to the high base caused by the increase in litigation in the past 15 years. Taken together, the company's return net profit was 200 million, an increase of 2.29%. The net cash flow generated by operating activities was 400 million, an increase of 152.2%, mainly due to the company's strengthening the management of accounts receivable and the increase in the recovery of project funds.
Consolidate the traditional business of housing construction and develop the business of municipal engineering
Combined with the development of the industry, the company not only tamps the traditional business of housing construction, but also adjusts the business structure timely, and gradually increases the proportion of municipal engineering business from 13 years. Since achieving zero breakthrough in the field of PPP in the past 15 years, the company has actively promoted the undertaking of PPP projects (currently undertaking a total of 3.52 billion PPP projects, accounting for 25.7% of 16-year revenue).
Investment suggestion
In recent years, the company has actively expanded its business to the external region, and strives to increase the proportion of business undertaken outside Ningbo. The short-term progress is limited, but it will gradually improve the company's business structure in the long run. The company actively promotes the ability to undertake PPP projects and pays attention to cultivating new profit growth points. The termination of the restructuring with Zhongjing Cloud has no material impact on the company's current main business, but short-term market sentiment may have a certain impact. For the first time covered, given a "hold" rating, it is estimated that the EPS in 17-19 will be 0.21 EPS, 0.23 pm, 0.24 PE and 33-31-29, respectively.
Risk hint: the growth rate of fixed asset investment in Ningbo has dropped significantly, and the project payback is not smooth.