I. Overview of events
According to the annual report released by the company in 2019, the company achieved an operating income of 3.22 billion yuan in 2019, + 25.55% year on year, and a net profit of 4.344 billion yuan, + 33.63% over the same period last year.
II. Analysis and judgment
Full-line operation and maintenance business: 2019 is the harvest year of strategic transformation, with good coordination with equipment sales business to achieve 280 million revenue from maintenance services, accounting for 8.84%. The company started with railway rail equipment and transformed into a full-line operator in 2017. In May 2019, the company won the bid for Tianjin Metro Line 7, opened the subway operation and maintenance market, and won the bid for Sanyo Railway in December 2019 to open the entire freight railway operation and maintenance market. In addition, the company has also obtained the operation and maintenance business of Hangzhou-Shaotai high-speed railway, Taizhou S1 urban railway and Tangshan port freight railway. The company's entire line of operation and maintenance projects make extensive use of its own intelligent equipment products, and promote rapid iterative upgrading of equipment. We believe that the whole line operation and maintenance business and equipment business form a good synergy, bringing new performance growth points.
Equipment business: expand in coordination with operation and maintenance, focus on R & D products to achieve batch sales of equipment categories to achieve a total income of 2.842 billion yuan, accounting for 78.58%. The underside inspection robot and roof inspection robot developed by the company in the early stage have formed contracts in Beijing Bureau, Menghua Railway and Hong Kong Metro, and are about to be sold in batches; the first generation of intelligent car washing machine for EMU skin has been successfully developed and formed batch orders. Other R & D projects have made major breakthroughs, such as the successful bid for the Yinxi passenger train control center system project by the subsidiary of Jiaotong University, breaking the restriction that the company cannot bid for train control center equipment due to non-guest performance.
The company's R & D investment in 2018 and 2019 was 21432 and 270.15 million yuan respectively, accounting for 9.47% and 8.39% of the operating income of that year, respectively. We believe that the company's continued high R & D costs will continue to launch new products, bring continuous market breakthroughs, and support the development of the company's equipment sales and operation and maintenance business.
Education, training, leasing business: generate revenue, implement the company's strategic education sector signed a contract of more than 5000 yuan, achieve income of more than 8 million yuan; lease plate signed a contract of about 430 million yuan, realized income of about 35.31 million yuan. The company's education sector provides the necessary staff training and supply for the operation and maintenance sector to ensure the high quality of the operation and maintenance; the leasing business helps to increase the market share.
The operating cash flow is positive, and the company's operation is substantially improved.
The operating cash flow of the company is 5.3193 million yuan, compared with-591 million yuan in the same period last year. The operating cash flow has changed from negative to positive, the tight situation of the company's cash flow has been alleviated, and the operation has substantially improved.
III. Investment suggestions:
It is estimated that from 2020 to 2022, the net profit of the company will be 5.06,6.45 and 774 million yuan respectively, corresponding to 17.7,13.9,11.6 times of PE, maintaining the "recommended" rating. At present, the company's pe ttm is only 20.6x, while the average pe ttm of the railway equipment sector is 35.33x.
Fourth, risk tips:
The subsequent arrival of new orders is not as expected, the payback cycle is too long, and the goodwill impairment risk.
