Steady growth in performance and great potential for new business development
In the first three quarters of 2019, the company achieved operating income of 4.92 billion yuan, an increase of 15% over the same period last year; net profit of 220 million yuan, an increase of 8% over the same period last year; and net profit after deducting non-return increased by 15% over the same period last year. In the first half of this year, the newly signed contracts of the company totaled 5.7 billion yuan, an increase of 2.4 percent over the same period last year, of which the contract value of design consulting projects was 3.6 billion yuan, an increase of 13 percent over the same period last year. The overseas market grew rapidly, and the total amount of newly signed foreign economic contracts in the first half of the year was 269 million yuan, an increase of 41 percent over the same period last year. The company announced that it intends to acquire 51% of the shares of Shanghai Landscape Garden, make up for the shortcomings of the industrial chain and expand the field of landscape ecology. after the completion of the acquisition, it will help the company to build a professional contracting capacity for the integration of design and construction and achieve complementary advantages.
Profitability remains stable
In the first three quarters of 2019, the company's gross profit margin was 22.56%, down 0.74pct from the same period last year, and the net profit rate was 5.10%, down 0.47pct from the same period last year. The decline in gross profit margin and net profit margin was mainly due to the increase in the company's engineering contracting business. During the period, the expense rate was 17.20%, which decreased by 0.37pct compared with the same period last year, in which the management expense rate decreased by 0.49pct to 16%, the financial expense rate increased by 0.13pct to 0.13%, and the sales expense rate decreased by 0.01pct to 1.07%. The asset-liability ratio was 66.24%, an increase in 1.51pct compared with the same period last year. Achieve operating net cash flow of-260 million, cash flow has improved, the same period last year was-440 million yuan.
Quarterly results fluctuate greatly
The company's 18Q4, 19Q1, Q2 and Q3 completed revenue of 1.695 billion yuan, 1.558 billion yuan, 1.866 billion yuan and 1.499 billion yuan respectively, an increase of-6.34%, 20.57%, 21.54% and 4.36% respectively over the same period last year. The net profit of returning to the mother was 56 million yuan, 82 million yuan, 087 million yuan and 56 million yuan, up-50.61%, 15.01%, 13.89% and-7.27% respectively. The company's performance fluctuates seasonally.
Investment suggestion: architectural design leader, maintain "buy" rating company is the largest architectural design institute in China, has an absolute advantage in the design field of super high-rise and landmark buildings, and the national layout has been initially completed. build the localized development of each business plate of the whole industry chain in the whole process. At present, the proportion of state-owned shares in Shanghai is still high, and there is great potential in state-owned enterprise reform and employee motivation in the future. We maintain our previous profit forecast that the company's EPS for 19-21 will be 0.57 and 0.65, respectively, and PE will be 16.0, 13.9 and 12.0, respectively, maintaining a "buy" rating.
Risk tips: bad accounts receivable, slowing down of investment in fixed assets, impairment of goodwill, etc.