The company recently released its 2019 semi-annual report that its revenue in the first half of the year was 897 million yuan, an increase of 120.36 percent over the same period last year. The net profit belonging to shareholders of listed companies was about 32 million yuan, an increase of 132.99 percent over the same period last year. The comments are as follows:
The bid-winning amount of engineering business has increased significantly compared with the same period last year, and the trend in the second half of the year is expected to continue.
In the first half of 2019, the company's engineering business won the bid amount of 4.85 billion yuan, an increase of 392.20% over the same period last year. Among them, the bid-winning amount of housing projects was 4.62 billion yuan, more than 15 times that of housing construction in the same period last year, while that of other projects was 190 million yuan, more than 19 times that of the same period last year. Construction business orders continued to increase in the first half of the year. As of June 30, Beit Jian'an had signed unfinished orders worth about 7.989 billion yuan, with a revenue ratio of 8.9 yuan. Since 2019, the company has decided to base itself on the construction of high-tech zones, especially the management policy of seizing the opportunity of airport new town construction. The company's engineering business orders have increased significantly. Since 19 years, it has won a number of major projects, and the company's orders are expected to increase further in the second half of 2017.
Revenue has risen sharply and gross profit margin has increased.
During the reporting period, the company's operating income was 897 million yuan, an increase of 120.36% over 407 million yuan in the same period last year, mainly due to a substantial increase in revenue from construction business over the same period last year. The operating income of the construction business was 820 million yuan, an increase of 143.19% over the same period last year, accounting for 91.40% of the total revenue, while the operating income of the futures brokerage business was 19 million yuan, down 6.11% from the same period last year. The company's overall gross profit margin is 14.98%, of which the gross profit margin of the construction business is 9.78%, an increase of 2.84% over the same period last year. With the start of municipal projects with relatively higher profits, the gross profit margin of the construction business is expected to continue to rise; the gross profit margin of the futures brokerage business reaches 100%, which is the company's main source of profit.
During the period, the expense rate dropped sharply compared with the same period last year, and the scale effect appeared.
The rate of expenses during the company period was 9.58%, down 3.55 percentage points from the same period last year. Among them, the sales expense rate was 6.07%, down 7.16% from the same period last year, the absolute number of sales expenses changed little compared with the same period last year, and the scale effect led to the decrease in sales expense rate; the management expense rate was 4.32%, down 1.53% from the same period last year. The main reason is that the management expense is relatively rigid relative to operating income, which is lower than the revenue growth rate. The financial expense rate was-0.81%, an increase of 5.13 percentage points over the same period last year, mainly due to the expansion of bank borrowing and the increase in interest expenses during the reporting period; the company did not collect R & D expenses. The net profit in the first half of the year is about 34 million yuan, an increase of 140.69% over the same period last year, which is in line with our expectations and is within the forecast range.
Operating cash flow has increased significantly, and it is proposed to issue shares in a private offering.
The cash-to-income ratio during the reporting period was 0.6399, a decrease of 27.98 percentage points compared with the same period in 18 years, mainly because the increase in operating income was greater than the increase in cash received by the company. The cash-to-pay ratio is 0.5739, up from 0.4416 in the same period last year. The net cash flow of operating activities was 189 million yuan, a substantial increase of 168.60% over the same period last year, mainly due to the increase in the net inflow of futures trading margin during the reporting period. During the reporting period, the company launched a non-public offering of shares, raising a total of no more than 800 million yuan, which will be used for PPP, EPC projects and supplementary liquidity related to the company's construction business to alleviate the financial pressure.
Investment suggestion
The company makes full use of the opportunities such as the construction of Chengdu Tianfu International Airport New City. with the gradual landing of the project in hand, the company is expected to maintain strong growth in the second half of the year. Maintain the EPS of 0.34,0.62,0.99 yuan per share in 2019-2021, maintain the "buy" rating, and maintain the target price of 13.50 yuan.
Risk hint: the project collection is not as expected and the project promotion is not as expected.