Event
On July 20, 2019, the company released its semi-annual report 2019. In the first half of 2019, the company achieved an operating income of 908 million yuan, an increase of 36.04% over the same period last year, and a net profit of 63 million yuan, an increase of 135.53% over the same period last year.
Comments:
The company's performance is in line with expectations, and business revenue has increased significantly in many areas.
According to the semi-annual report, the company's business has grown in an all-round way. Among them, sales revenue in traditional areas, rail transit market, nuclear power and new energy, and overseas markets reached 540 million yuan, 159 million yuan, 127 million yuan and 139 million yuan respectively, up 98.53%, 262.86%, 103.85% and 34.95% over the same period last year. During the reporting period, the company won the bid for the first demonstration project of "Hualong No. 1" in the world-the No. 5 unit project of Fuqing Nuclear Power Station, and the project order of Shidao Bay Nuclear Power Station, the first high temperature gas-cooled reactor demonstration project in the world. The company's photovoltaic and wind power business continued to advance, photovoltaic cable orders increased significantly, and wind power orders maintained steady growth.
The management level of accounts receivable has been improved, and the profitability has been continuously improved.
In the first half of 2019, the balance of accounts receivable as a percentage of operating income decreased by 2.11 percentage points compared with the same period last year, and the recovery rate of sales funds increased by 22.95 percentage points. In the future, the company will reduce the risk of accounts receivable collection to the greatest extent by improving the management methods of accounts receivable and constantly improving the customer credit system.
At the same time, the company's profit level has improved, and the comprehensive gross profit margin and net sales margin have increased by 3.87 and 2.86 percentage points respectively compared with the same period last year to 21.05% and 6.86% respectively.
The winning projects have been disclosed many times so far this year, and the total contract amount accounts for 84.75% of last year's revenue. From 2019 to now, statistical companies have disclosed that the total amount of winning contracts is about 1.335 billion yuan, accounting for 84.75% of the audited business income in 2018. Among them, the cable procurement project of Unit 5-6 of Fuqing Nuclear Power Station, the photovoltaic project of Xinjiang Oriental Hope New Energy Co., Ltd. and the rail transit project developed and cooperated with China Railway electrification Bureau and China Railway second Bureau all show the overall strength of the company. Announced on May 22, 2019, the company and Dafeng District of Yancheng City, Jiangsu Province decided to carry out strategic cooperation in offshore wind energy development, new energy and other fields, and the company is expected to further develop submarine cable business.
Investment advice and profit Forecast
It is estimated that the company's income from 2019 to 2021 will be 2.114 billion, 2.674 billion and 3.088 billion respectively, and the net profit will be 122 million, 163 million and 186 million respectively, and the PE corresponding to the current stock price will be 40, 30 and 26 times, giving the company an investment rating of "holding".
Risk hint
The macroeconomic downturn led to lower-than-expected cable sales, product competition incentives led to a downward gross profit margin, accounts receivable less than expected, and raw material prices fluctuated sharply in the short term.