The company released its annual report in 2019 and quarterly report in 2020, 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. In the first quarter of 2020, the operating income was yuan, compared with the same period last year; the net profit returned to the home was yuan, compared with the same period last year.
Main points of the report:
The Q1 loss was mainly due to the delay of domestic projects caused by the epidemic and the sharp depreciation of the Mexican peso exchange rate. Affected by the "COVID-19" epidemic, the company's contract project delivery was generally delayed in the short term in the first quarter.
In addition, the sudden sharp depreciation of the Mexican peso exchange rate at the end of the first quarter led to periodic losses for the subsidiaries, and we expect the loss to be about 1-200 million yuan. With the effective control of the domestic epidemic, project delivery has gradually returned to normal, and future profits are expected to return to compensatory recovery.
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 company's annual revenue in 19 years has increased by 33.6%, mainly due to the improvement of the company's intelligent transportation and water treatment business sector. In 19 years, the company's 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 large performance release flexibility. At present, the company's rail transit signal system has an order of 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.
27.78 32.98% 1.34 395.62% 341m yuan, down 33.76% from the same period last year; the net profit returned to the mother was-153 million yuan, down 1590.61% from the same period last year
Main points of the report:
The Q1 loss was mainly due to the delay of domestic projects caused by the epidemic and the sharp depreciation of the Mexican peso exchange rate. The delivery of contract projects in the first quarter of the company was generally delayed in the short term. With the effective control of the domestic epidemic, project delivery has gradually returned to normal, and future profits are expected to return to compensatory recovery. In addition, the sudden sharp depreciation of the Mexican peso exchange rate led to exchange losses in overseas subsidiaries, and the company's financial expenses increased by about 153 million yuan compared with the same period last year, which had a great impact on net profit.
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 of the company has increased by 32.98%, mainly due to the improvement of the management capacity of the company's intelligent transportation and water treatment business sectors. The company's 19-year net profit increased by 395.62%, and the net interest rate was 4.82%, an increase of 3.53pct over 18 years. The significant increase in profit is mainly due to the increase in gross profit margin of the company's intelligent transportation business and water treatment business and the weakening impact of subsidiary goodwill impairment on the company's performance.
With a substantial increase in signal system orders and an increase in the proportion of revenue from self-research systems, the performance released flexibility. In 19 years, the company's intelligent transportation business signed orders of 2.817 billion yuan, an increase of 69% over the same period last year, of which the newly signed orders of rail transit signal systems were 2.246 billion yuan, an increase of 167% compared with the same period last year. AFCACC order 417 million yuan.
Newly signed orders for energy conservation and environmental protection business totaled 1.397 billion yuan, an increase of 82 percent over the same period last year. The main line order of the self-research signal system is about 1.392 billion yuan, accounting for about 70%; the income of the self-research project in 19 years is about 455 million yuan, accounting for 39.19% of the signal system income. The gross profit margin of the company's self-developed signal system is much higher than that of the joint venture project, which 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.
Accelerated project approval, special bonds and other financing means to provide incremental funds, urban rail construction certainty is high by the end of the first quarter, the country issued 1.08 trillion yuan of new special bonds, + 63% year-on-year; the third batch of special debt lines will also be issued soon, and strive to be completed in the second quarter, the total scale issued in advance will exceed the whole of last year; the scale of special bonds will mainly be invested in rail transit and other infrastructure areas. Since the beginning of this year, the National Development and Reform Commission has successively approved urban rail transit construction plans in Xuzhou, Shenzhen, Hefei and other places, and infrastructure projects in various places have also been speeding up.
Profit forecast and investment suggestion
With the acceleration of urban rail transit construction and the increase in the proportion of the company's self-research system, the rail transit plate is expected to release profit elasticity. We estimate that the company's revenue in 20-22 will be 31.7 yuan, 35.8 yuan and 4.06 billion yuan, respectively, and the net profit of returning to the mother will be 2.1 million yuan, respectively, corresponding to the current PE of 20-14-10.
Maintain 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.