Events:
The company released its three-quarter report in 2019. During the reporting period, the company achieved a revenue of 3.3 billion yuan, an increase of 69%, and a net profit of 250 million yuan, an increase of 16%. In the third quarter alone, the revenue was 1.4 billion yuan, an increase of 108%, while the net profit returned to the mother was 93 million yuan, an increase of 77%.
In the first three quarters, the company signed new orders of 6.6 billion yuan, an increase of 112%. Of this total, 2.4 billion yuan was signed in the third quarter alone, an increase of 600 percent.
Comments:
The company's revenue and orders have significantly accelerated, which is mainly affected by the investment boom in Pudong region and the company's active business expansion. After the acceleration of revenue in the third quarter, it will not be difficult to judge that the company has completed its 19-year revenue guidance plan. The order execution speed of the company is fast, and the newly signed orders are abundant, which provides a guarantee for the growth next year and the year after next. In the first three quarters, the company's comprehensive gross profit margin was 10.4%, with an increase in 0.9pct and a decrease in 0.7pct. If subsequent large projects are completed and settled, the gross profit margin may be flexible. Investment income (mainly structural deposits) is about 119 million yuan, accounting for about 44% of operating profit, accounting for a decrease in 23pcts compared with the same period last year.
At the end of the period, the company has cash on hand (currency + transactional financial assets) of about 6.1 billion yuan and interest-bearing liabilities of about 700 million yuan. During the reporting period, the company's operating cash flow net inflow of 560 million yuan, project rebate has been significantly improved.
High revenue and orders, raise profit forecasts and maintain "buy" ratings:
The company is an A-share scarce project management + investment and financing enterprise, characterized by the "three high" per capita output value, profit and salary. The company obtains excess returns by optimizing project management and shares long-term benefits by investing in selected infrastructure projects. At present, its excess cash is not its means of production, and the equity multiplier is only 2x. In the future, with the increase of regional high-quality projects, both investment and main business are expected to achieve rapid growth, ROE will have greater flexibility.
The company's revenue growth accelerated as scheduled, the main gross profit margin was slightly under pressure, and the marginal impact of investment income weakened. The growth rate of income and orders exceeded expectations, and the income forecast was raised and the EPS forecast for 2019-2021 was raised to 0.54,0.63 and 0.76 yuan (the original value was 0.50,0.55,0.65 yuan). Considering that with the construction of Shanghai Free Trade New area and the continuous promotion of the integration of the Yangtze River Delta, the company's ROE will be flexible, maintain the target price of 9.41 yuan, and maintain the "buy" rating.
Risk hint: regional investment is not as expected, and the return on investment has changed greatly.
