1. Investment event
The company announced that the securities firm continued to supervise the on-site inspection report in 2019.
The company announced that in the three quarters of 2019, the company achieved operating income of 1.254 billion yuan, down 15.41% from the same period last year, and net profit of 181 million yuan, down 13.04% from the same period last year.
two。 Analysis and judgment
The performance was in line with expectations, and the growth rate of performance in a single quarter picked up slightly. In 2019, Q1-3 achieved operating income of 1.254 billion yuan, down 15.41% from the same period last year, and realized net profit of 181 million yuan, down 13.04% from the same period last year. Non-net profit was deducted from 184 million yuan, down 10.33% from the same period last year.
The decline in performance during the reporting period was mainly due to the impact of the domestic macroeconomic and market environment, and the overall growth rate of the industry slowed down. Q3 achieved an operating income of 443 million yuan in a single quarter, an increase of 3.51% over the same period last year, and a net profit of 57.6712 million yuan, a decrease of 8.24% over the same period last year. The net cash flow generated by the company's operating activities from January to September 2019 was-221 million yuan, a decrease of 345.01% compared with the same period last year, mainly due to the long construction period of PPP and EPC projects during the reporting period and the failure to reach the payback period. The weighted ROE is 4.21%, which is lower than the same period last year. EPS was 0.29 yuan per share, a decrease of 16.19% compared with the same period last year.
The gross profit margin continued to rise, and the expense rate increased during the period. 2019Q1-3 has a gross profit margin of 35.67%, an increase of 5.29pct over the same period last year, and a net profit of 14.05%, an increase of 0.44pct over the same period last year.
The expense rate during the period of the company is 16.05%, which is higher than that of the same period last year. Among them, the financial expense rate was 5.8%, an increase of 1.5pct over the same period last year; the management expense rate was 10.25%, an increase of 3.98pct over the same period last year; during the reporting period, the company's R & D expenses totaled 33.6071 million yuan, an increase of 212.60% over the same period last year. The company attaches importance to the construction of R & D platform, scientific research investment has achieved certain results, and is expected to enhance the competitiveness of the company's services and products.
Stabilize the scale and adjust the structure, and wood interest will help the development. In order to cope with the changes in the market environment, the company adjusts its strategy and carefully evaluates the project, resulting in a decline in the scale of business. On the other hand, the company adjusts and optimizes the business structure, business area and management structure to improve revenue and profit quality. Since the beginning of 2019, the company has comprehensively promoted the development of the three main businesses of ecological restoration, ecological culture and tourism, and ecological products, focusing on the market breakthrough of ecological products. Wuxi Muqu Co., Ltd. was established in the first half of 2019, which has further consolidated its position as a leading enterprise in the R & D, production, application and sales of wood organic mulch products in China. In addition, the company's business regional structure optimization and adjustment has achieved remarkable results, the income of each region is more balanced, and the proportion of business income in the core region has increased rapidly. Overall, the company in the complex market environment, focus on optimizing revenue and profit quality and achieve remarkable results, the future performance is expected to benefit.
3. A brief Analysis of Finance
From 2015 to 2017, the company's operating income and return net profit increased greatly, and the performance declined from 2018 to 2019, while the decline of Q1-Q3 operating income decreased in 2019. In 2019, Q1-Q3 's operating income decreased by 15.41% compared with the same period last year, and its net profit decreased by 13.04% compared with the same period last year.
The growth rate of the company's operating income has continued to slow in the past ten quarters, and the net profit of Q1 company has declined sharply in 2018.
In 2019, both the operating income and the net profit of Q3 rebounded, with revenue up 4% year-on-year, and net profit decreased by 8%.
The expense rate of the company has been increasing continuously since 2017, and the expense rate during the period of Q1-Q3 in 2019 was 5.8%. The company's gross profit margin and return-to-home net profit margin have continued to rise since 2017. In 2019, Q1-Q3 's gross profit margin was 35.67%, and the return-to-home net profit rate was 14.48%.
4. Investment suggestion
It is estimated that from 2019 to 2021, the EPS of the company will be 0.62 won 0.69 RMB 0.77 yuan per share, and the corresponding dynamic P / E ratio will be 17.93 won 16.10 pm 14.30 times, respectively, maintaining the "recommended" rating.
Risk tips: the risk of a decline in investment in fixed assets; the risk that business development is not as expected; and the risk that the recovery of accounts receivable is not as expected.