Events:
On the evening of November 21, the company announced that the company had won the bid for the EPC project of Yangjiahu and its surrounding ecological restoration project in Nanchang Airport Economic Zone, with a bid price of 401 million yuan and a construction period of 730 days. In this regard, our comments are as follows:
Main points of investment:
Pre-winning large-scale EPC project, sufficient on-hand orders to ensure performance growth the construction contents of the ecological restoration project of Yangjiahu and its surrounding ecological restoration project in Nanchang Airport Economic Zone include municipal roads and bridges, service rooms, landscape platforms, rest pavilions, public toilets, garden roads, walkways, landscape facilities, park greening, beautification, lighting, night scene lighting, surrounding slow walking connection system and other ecological restoration infrastructure projects. On the 730th day of the construction period, the bidding price for the project is 401 million yuan. this project is another project of more than 400 million yuan after Jianhu, the bid copper in 2018. On the one hand, it shows customers' recognition of the company's brand. On the other hand, 401 million yuan is 76.74% of the company's 2018 revenue, which can significantly increase the company's performance. Since 2019, it has successively won the general contract project of tourism infrastructure supporting project of Liangzhu site Park (217 million yuan), the environmental improvement project of Shilongshan South Block and the EPC general contract project of Lingshan Road upgrading project (181 million yuan), and the Huaibei Shuo West Lake environmental treatment project (256 million yuan). Together with the pre-winning project, the contract project currently in hand exceeds 1.1 billion yuan, with orders on hand sufficient to ensure future performance growth.
Invest in Dream Culture to improve the company's design and operation capabilities
In July 2019, the company invested 40 million yuan in Shanghai Manmeng Culture, the main business of Manmeng Culture is to obtain the animation image IP license to use it for hotel, tourism image reconstruction, including: 1, animation image IP theme room reconstruction and authorization; 2, animation image IP main hotel authorization; 3, animation derivatives sales; 4, hotel management output. So far, Dream Culture has obtained the copyright of "Totoro", "Kumamoto Bear", "Bread Superman", "uglydoll" and Hans Christian Andersen fairy tale series characters, and signed agreements with Hyatt, Intercontinental, Greenland, Jinjiang, Yaduo, etc., and has so far renovated or authorized about 500 hotel rooms. The 2020 target is to renovate 5000-6000 hotel rooms. The company invests Manmeng Culture in the literature and travel industry, on the one hand, it can improve the company's design ability in the animation field, and integrate animation elements into the design of the company's wetland parks, scenic spots and other fields. on the other hand, the operation experience of Manmeng Culture in the hotel can bring coordination for the company to expand its operation business and thicken the company's performance.
Profit forecast and investment rating: maintain the company's "overweight" rating. It is estimated that the company's EPS from 2019 to 2021 will be 0.61,0.74 and 0.88 yuan respectively, and the corresponding share price PE will be 32, 26 and 22 times respectively, maintaining the company's "overweight" rating.
Risk hints: the risk that the project expansion is less than expected, the risk of a substantial increase in accounts receivable, the uncertainty risk of expanding into the engineering field, the upward risk of interest rate, the lower-than-expected risk of contract execution, and the lower-than-expected risk of synergy with dream culture, macroeconomic downside risk.