1. Investment event
The company announces its 2019 semi-annual report. 2019H1 achieved an operating income of 751 million yuan, an increase of 13.92% over the same period last year. The net profit of returning to the mother was 84 million yuan, an increase of 13.88% over the same period last year.
two。 Analysis and judgment
The performance improved steadily as scheduled. 2019H1 achieved an operating income of 751 million yuan, an increase of 13.92% over the same period last year. The company realized a net profit of 84 million yuan, an increase of 13.88% over the same period last year.
The current non-net profit is 78 million yuan, an increase of 8.7% over the same period last year. Expenditure on R & D was 39 million yuan, an increase of 62.5% over the same period last year. The company realized the net cash flow of operating activities-175 million yuan, an increase of 19 million yuan over the same period last year. EPS is 0.3 yuan per share, an increase of 0.04 yuan per share compared with the same period last year. The company's performance continues to grow steadily and healthily.
Profitability is stable, EPC braved the wind and waves. 2019H1's comprehensive gross profit margin was 25.24%, down 0.72 pct from the same period last year; the company's net profit margin was 11.11%, unchanged from the same period last year. During the reporting period, the company's EPC business won the bid (or was announced as the winning bidder) 2.938 billion yuan of Suzhou Yangcheng Lake Scenic area supporting hotel design and construction general contract (EPC) project, 314 million yuan of the new SIG Kangmeibao Taisan third plant project general contract project, 867 million yuan of Kunshan Duke University Phase II EPC project section II (northwest side building monomer + outdoor project + integrated pipe network) and other major projects It fully reflects the advantage that the company makes use of its own design technical strength and project management experience to further promote the "design-led project general contracting mode". With the landing of new orders, the company's future performance is guaranteed.
The construction of the free trade zone is expected to benefit. On August 26, the State Council issued the General Plan of six newly established Free Trade pilot zones, including the overall Plan of China (Jiangsu) Free Trade pilot Zone and the overall Plan of China (Guangxi) Free Trade pilot Zone. Jiangsu Free Trade pilot Zone covers an area of 119.97 square kilometers, covering three areas: Nanjing area 39.55square kilometers, Suzhou area 60.15square kilometers (including Suzhou Industrial Park Comprehensive Free Trade Zone 5.28square kilometers), Lianyungang area 20.27square kilometers (including Lianyungang Comprehensive bonded area 2.44square kilometers). Suzhou District will build a world-class high-tech industrial park to create omni-directional open highlands, international innovation highlands, high-end industrial highlands, and so on. The construction of Suzhou Free Trade Zone is expected to promote the regional integration of the Yangtze River Economic Belt and the Yangtze River Delta. The company's Zhongheng Design Building (the current headquarters of the Group) located in Dushu Lake Science and Education Innovation Zone and the former R & D center office building of Suzhou Industrial Park located in Jinjihu Business District are located in the core area of Suzhou Free Trade Zone. As a leader in architectural design and EPC, the company is expected to fully benefit from the construction of Suzhou Free Trade Zone in the future.
The joint balance plan is expected to help the construction of Qinzhou Free Trade Zone in Guangxi. The Guangxi Free Trade pilot Zone covers an area of 119.99 square kilometers, covering three areas: Nanning area 46.8 square kilometers (including Nanning Comprehensive Free Trade area 2.37 square kilometers), Qinzhou Port area 58.19 square kilometers (including Qinzhou bonded Port area 8.81 square kilometers), Chongzuo area 15 square kilometers (including Pingxiang Comprehensive bonded area 1.01 square kilometers). Among them, the Qinzhou Port area focuses on the development of port and shipping logistics, international trade, green chemicals, key parts of new energy vehicles, electronic information, biomedicine and other industries, creating a new gateway for international land and sea trade and Xianghai economic agglomeration area. Guangxi Zhongma Park Lianheng Planning and Research Institute Co., Ltd. (hereinafter referred to as "Lianheng Planning") is located in Qinzhou, Guangxi, with a shareholding ratio of 44.74%. Lianheng Planning mainly serves the planning and construction of China-Malaysia Industrial Park. The company has successful experience in the design and planning of Suzhou Industrial Park, which is expected to serve the construction of Qinzhou Free Trade Zone in Guangxi in the future.
Indirectly invest in science and technology start-up enterprises to open up the growth space. The company indirectly took a stake in the cloud computing enterprise Shanghai Youkade Information Technology Co., Ltd. (Ucloud). Ucloud is a leading third-party cloud computing service provider in China. Ucloud provides three model services: public cloud, private cloud and hybrid cloud. Public cloud is the core business, while private cloud and hybrid cloud are key areas of development. Public cloud products include computing, network, storage, database, data analysis and distribution; private cloud core products include UMOS, UMstor, MCP, proprietary cloud services and containers; hybrid cloud is mainly composed of cabinet hosting, customized physical machine, VPN gateway, public network, private network, cloud interconnection service, operation and maintenance service and other modules. Ucloud already has a number of industry-leading or innovative cloud computing technologies, including kernel hot patch technology, data rollback technology, software-defined network, load balancing technology, distributed database, safe house and so on. Ucloud ranked sixth in the domestic public cloud market in the first half of 2018.
The listing of Ucloud on Kecheng Board has been inquired by the Shanghai Stock Exchange. In 2018, the operating income was 1.187 billion yuan, an increase of 41.39% over the same period last year, and the net profit was 80 million yuan, an increase of 4.54% over the same period last year. The deduction of non-net profit was 83 million yuan, an increase of 53.61%.
At present, Ucloud has declared that Kechuang is listed on the board and has been accepted by the Shanghai Stock Exchange. As of April 1, 2019, the top ten shareholders of Ucloud hold 10.18% of the shares of Yuanhe Chongyuan Youyun Venture Capital Enterprise (Limited Partnership) in Zhongzhou Industrial Park.
Suzhou Industrial Park Suyou Equity Investment Enterprise (Limited Partnership) is the shareholder of Yuanhe Chongyuan Youyun Venture Capital Enterprise (Limited Partnership) in Suzhou Industrial Park.
Zhongheng Design Group is one of the shareholders of Suyou Equity Investment Enterprise (Limited Partnership) in Suzhou Industrial Park. If Ucloud succeeds in landing on the Kechuang board, it is expected to grow with the help of the financing advantages of the capital market. Zhongheng Design, as an indirect shareholder of Ucloud, is expected to share the dividend brought by the growth of Ucloud.
Jiangsu Beiren, which is indirectly invested by the company, is listed on the Kechuang board. The company contributed 50 million yuan to join the property share of 50 million yuan of Yuanhe Chongyuan No.2 equity investment fund partnership (limited partnership) (hereinafter referred to as "Suzhou Yuanhe") in Suzhou Industrial Park. Suzhou Yuanhe holds a 3.67% stake in Jiangsu Beiren Robot Systems Co., Ltd. (hereinafter referred to as "Jiangsu Beiren"). Jiangsu Beiren is mainly engaged in industrial robots for welding, customized furniture and non-welding industrial robots.
The operating income of Jiangsu Beiren reached 413 million yuan in 2018, an increase of 64.5% over the same period last year. The net profit returned to the mother was 48 million yuan, an increase of 42.19% over the same period last year. Jiangsu Beiren is currently applying for listing on Kechuang Board, and the company is expected to benefit indirectly.
The company indirectly holds shares in Borey Pharmaceutical reporting Division, which is listed on the pioneer board. Borey Biopharmaceutical (Suzhou) Co., Ltd. (hereinafter referred to as "Borey Pharmaceutical") is applying for listing on Kechuang Board and has been inquired by the Shanghai Stock Exchange. According to the prospectus, Delui Hengfeng, who participated in the company, holds a 1.9297% stake in Bouri Pharmaceutical, ranking Bouri Pharmaceutical's 15th largest shareholder. Bouri Pharmaceutical is a high-tech enterprise integrating high-end generic drugs, innovative drugs, preparations and so on. In 2018, the operating income of Bouri Pharmaceutical reached 408 million yuan, an increase of 28.64% over the same period last year. The net profit of returning to the mother was 73 million yuan, an increase of 59.56% over the same period last year. The performance of Boren Pharmaceutical has grown rapidly in recent years, and the company is expected to share the dividend of Boren Pharmaceutical Development in the future.
3. A brief Analysis of Finance
The company's operating income has continued to grow since 2014. In 2018, the company's operating income increased by 28.32% over the same period last year, and its net profit increased by 11.74% compared with the same period last year. In 2019, the operating income of H1 company increased by 13.92% over the same period last year, and its net profit increased by 13.88% over the same period last year.
Q3 from 2017 to 2018 Q1 company's single-quarter operating income growth rate gradually increased compared with the same period last year, but then gradually slowed down, Q2 rebounded in 2019. In 2019, the Q2 company's quarterly return net profit was flat compared with the previous quarter.
Since 2015, the expense rate has remained stable during the company period, and the gross profit margin and net profit margin have been relatively stable.
4. Investment suggestion
The company is expected to have a "recommended" rating of 1.01 yuan per share for EPS and 11 times for PE for 2019-2020.
Risk tips: the risk of a sharp decline in fixed asset investment; the risk that business development is not as expected; the risk that the recovery of accounts receivable is not as expected; and the risk that foreign investment is not as expected.