Summary of the report:
The trend of assembly design is obvious, and there is a broad space for the company's performance growth. A number of state ministries focus on promoting prefabricated construction, promoting prefabricated decoration, and vigorously developing prefabricated buildings. China started 420 million square meters of prefabricated buildings in 2019, an increase of 45% over the same period last year. Recently, thirteen departments such as the Ministry of Housing and Construction have jointly issued the guidance on promoting the coordinated Development of Intelligent Construction and Building industrialization, proposing to vigorously develop prefabricated buildings and set development goals for 2025 and 2035. At present, the proportion of assembly in the company's residential design business is roughly estimated to reach about 80%, which effectively meets the needs of the current construction market for assembly design, and has a broad space for growth in the future.
The industry pattern is gradually changing, and the chain operation accelerates the market expansion. At present, the market pattern of the engineering survey and design industry is changing from business line segmentation to business integration, and the market M & An activities are becoming more and more frequent; after the acquisition of Hangzhou shares, the company has signed a number of municipal common project orders, which improves the company's profitability.
The company's location advantage is prominent, and the market demand is accurately covered. The company's head of the triangle core area, the region's fixed asset investment and urbanization scale are in the forefront of the country. The competition in the assembly design industry has significant regional characteristics. East China is the region with the largest number of assembly construction projects in China, and the company's branches are concentrated in East China and expand to the whole country. The location of the company can effectively cover the market demand of assembly construction in this area.
We will increase investment in information-based research and development and continue to build core competitiveness. In recent years, the company's R & D investment has continued to increase, and the R & D expenditure in 2019 increased by 41.25% compared with the same period last year. At present, the drawing rate of computer and CAD design has reached 100%. With the company continues to enhance the level of information technology and talent structure optimization, the company's own core competitiveness continues to strengthen, market share is expected to continue to increase.
Urban and rural upgrading promotes demand, and business collaboration drives performance improvement. The country continues to promote the construction of a new type of urbanization, and the demand for urban and rural planning is gradually increasing. The company has comprehensive design service capabilities, business plate services cover urban complex, office hotel, residential, medical construction, landscape planning and other areas, market demand driven by differentiation to improve comprehensive performance.
Maintain the company's "buy" rating and raise its six-month target price to 22 yuan with reference to the valuation of similar companies. It is estimated that the EPS of the company from 2020 to 2022 will be 0.55 plus 0.71 plus 0.93 yuan respectively.
Risk hint: the development of prefabricated buildings is not as expected, and the progress of the old reform is not as expected.
