Events:
The company announced on the evening of July 18 that the company signed an investment cooperation agreement with Shanghai Manmeng Culture Media Co., Ltd. (Manmeng Culture) and its shareholders to increase capital to Manmeng Culture with its own capital of 40 million yuan. In this regard, our comments are as follows:
Main points of investment:
Invest in Dream Culture to improve the company's design and operation capabilities
The main business of Manmeng Culture is to use it for hotel and tourism image reconstruction after obtaining the license of animation image IP, which mainly includes: 1, animation image IP theme room reconstruction and authorization; 2, animation image IP subject hotel authorization; 3, animation derivatives sales; 4, hotel management output. So far, Dream Culture has obtained the copyright of "Totoro", "Kumamoto Bear", "Bread Superman", "uglydoll" and Hans Christian Andersen fairy tale series characters, and signed agreements with Hyatt, Intercontinental, Greenland, Jinjiang, Yaduo, etc., and has so far renovated or authorized about 500 hotel rooms. The company invests in Manmeng culture to improve the company's design ability in the animation field, and can integrate animation elements into the design of the company's wetland parks, scenic spots and other fields. in addition, the operation experience of Manmeng culture in the hotel can bring coordination for the company to expand its operation business and thicken the company's performance.
Sufficient orders on hand, high performance growth is guaranteed.
The company is a leading enterprise in the domestic landscape design industry, while consolidating the design business, giving full play to the design business to grasp the overall entrance advantages of the project, and actively expand to the downstream EPC, engineering and other business, the current EPC business expansion is smooth. In the first half of 2019, the company successively won the general contract project of tourism infrastructure supporting project of Liangzhu ruins Park (217 million yuan), the environmental improvement project of Shilongshan south block and the EPC general contract project of Lingshan Road upgrading project (181 million yuan). At present, the contract project is more than 700 million yuan, which is 133% of the company's revenue in 2018. In the first half of 2019, the company realized a net profit of 3185.16 million yuan belonging to shareholders of listed companies, an increase of 30-35% over the same period last year. High growth in the performance of sufficient orders on hand is guaranteed.
Profit forecast and investment rating: maintain the company's "overweight" rating. We are optimistic about the company's brand advantages and the growth space brought by the expansion of EPC business. It is estimated that the company's 2019-2021 EPS will be 0.77,0.97,1.14 yuan respectively, and the previous share price PE will be 27,22,19 times, maintaining the company's "overweight" rating.
Risk hints: the risk that the project expansion is less than expected, the risk of a substantial increase in accounts receivable, the uncertainty risk of expanding into the engineering field, the upside risk of interest rate, the lower-than-expected risk of contract execution, the lower-than-expected risk in coordination with the dream culture, and the macroeconomic downside risk.