Events:
On April 14, the company released its 2019 annual report, KuaiBao, with revenue of 2.791 billion yuan in 2019, + 33.59% year-on-year, and net profit of 141 million yuan, an increase of 423.38% over the same period last year.
2. The company issued a forecast of its quarterly results in 2020, with an estimated loss of 1.26-160 million yuan.
Main points of the report:
The Q1 loss is mainly due to the delay of domestic projects and the sharp depreciation of the Mexican peso exchange rate due to the epidemic.
Affected by the "COVID-19" epidemic, the company's contract project delivery was generally delayed in the short term in the first quarter. With the effective control of the domestic epidemic, project delivery gradually returned to normal, and future profits are expected to return to compensatory recovery. In addition, the epidemic spread around the world at the end of February, with the US dollar as a safe haven fund, appreciating against the currencies of major countries, Mexico's long-term weak economic growth and US dollar outflow under the impact of the epidemic, and the Mexican peso depreciated sharply. The company's overseas subsidiaries have periodically increased their financial expenses due to exchange rate fluctuations.
The substantial increase in performance in the past 19 years is mainly due to the fact that the rail transit business has entered the performance cashing stage and the profitability has improved.
The company's annual revenue increased by 33.6% in 19 years, mainly due to the improvement of the business capacity of the company's intelligent transportation and water treatment business. In 19 years, the company's annual net profit increased by 423%, and the net interest rate was 5%, which was higher than that of 18 years by 3.8pct. The substantial increase in profits is due, on the one hand, to the increase in the gross profit margin of the company's intelligent transportation business and water treatment business and the weakening impact of the impairment of the goodwill of subsidiaries on the company's performance; on the other hand, it is due to the failure of Suzhou Kehuan to fulfill its performance commitments. the company recognized an investment income of 46.95 million yuan in the third quarter.
The rail transit signal system has sufficient orders on hand, strong order persistence, and great flexibility in performance release.
At present, the order for the company's rail transit signal system is about 4 billion yuan. In 2019, the bid was increased by 2.18 billion yuan, + 256% compared with the same period last year, and the self-developed system accounted for 63.85%. The gross profit margin of the company's self-developed signal system is much higher than that of the joint venture project, and the increase in the proportion of self-research will drive the gross profit margin of the company's rail transit signal system to rise gradually. In the next few years, urban rail construction is in full swing, the order of the company's rail transit signal system continues to be strong, and the company's signal system has entered a period of high revenue recognition. We estimate that the income break-even point of the rail transit signal system is about 1 billion yuan. When the income exceeds the break-even point, the performance is more flexible.
Profit forecast and investment suggestion
It is estimated that the revenue of the company in 19-21 years will be 27.91 / 32.25 / 3.682 billion yuan respectively, and the net profit of returning to the mother will be 1.4 billion yuan respectively, corresponding to the current PE of 32-22-15. Considering that the company has sufficient orders on hand and the delivery has entered the confirmation acceleration stage, the company is given a "buy" rating.
Risk hint
Urban rail transit project bidding progress is not as expected; accounts receivable and other assets impairment risk; environmental protection business integration is not as expected.
Disclosure of Guoyuan position: less than 1% or more, there is no need to disclose.