The first unit of land and spatial planning, outstanding technical strength and rapid growth. The company is the first listed company in China to focus on land and spatial planning, with Class A qualifications for urban and rural planning, construction engineering, municipal roads, landscape architecture, engineering consulting, and Grade B for water supply and drainage, bridges and land planning. it has won 7 national honors, 46 provincial awards and 65 municipal honors, creating a whole solution platform with creativity, science and technology and services. Provide an overall solution for the whole life cycle of land, and become the first unit of land space planning in A-share market. The company focuses on urban and rural planning and actively expands its engineering design and consulting business. Affected by the fluctuation of the economic environment, the growth rate of the company's operating income shows a downward trend. From 2017 to 2019, the company totaled 368 million yuan, 446 million yuan and 442 million yuan, up 31.52%, 21.18% and-0.73% respectively over the same period last year. The company has strong profitability, with gross margins of 38.32%, 43.61% and 42.95% in 2017-2019, and net profit rates of 19.64%, 22.56% and 24.31% respectively.

The land and space planning welcomes the policy support, and the prospect of opening the market space is expected. The Ministry of Natural Resources was established in March 2018 to uniformly exercise all the responsibilities of land and space use control and ecological protection and restoration, and strive to solve the problems of inadequate owners of natural resources and overlapping spatial planning. Land and spatial planning ushered in a new chapter in development. The state has issued a number of important policies of land planning and sound, "some opinions on the establishment of land spatial planning system and supervision of implementation" has realized the "integration of multiple regulations", and the circular of provincial land spatial planning guidelines (implementation) stipulates the positioning, compilation principles, tasks, contents, procedures, control and guidance requirements of provincial land spatial planning. Provincial land spatial planning ushered in national standards. The development of the industry ushered in the policy Dongfeng, land spatial planning market space opened. According to the Taber think tank research report, the total size of China's new round of land and spatial planning market will reach 46 billion yuan to 75 billion yuan, and the planning and design institute is expected to fully benefit.

Base on Shenzhen, focus on Daya Bay, lay out the whole country, and promote the layout of fund-raising projects as smart cities. The company is based in Shenzhen and focuses on Daya Bay. The company develops and grows with the construction of Shenzhen Special Economic Zone, providing planning and design support for many landmark projects in Shenzhen, such as Shenzhen Universiade Hub and Shenzhen Pinghu Hub. At the same time, the company focused on Daya Bay, set up the Bay area Development Research Institute, increased the expansion of projects in the province, and achieved remarkable results, such as the Songshan Lake area project in Guangdong. In addition, the company has actively laid out the country and set up branches and business points in a number of provinces and cities. in the future, it will increase the deployment and construction of branches in Zhejiang, Jiangsu and other places, and speed up the construction of the national business network. The funds raised by the company's IPO are mainly used for the design platform, innovation development research center and information system construction, among which the innovation development research center project is mainly to build the future city (planning) simulation laboratory and to build "smart city simulation system", "intelligent transportation simulation system", "intelligent municipal simulation system", "intelligent park simulation system" and "intelligent community simulation system". To build a smart city through fund-raising projects.

The advantages of qualified talents are obvious, the position of the industry is stable, and the cash flow of sufficient orders is excellent. The company has various qualifications in the field of spatial planning and design, perfect talent echelon, and has completed a number of classic projects. in the past 30 years of development, the company has accumulated rich project experience and a remarkable position in the industry. it is helpful for the company to copy and promote the experience of South China to the national market. The company is a pioneer in the land and space planning industry, with a foothold in Shenzhen, focusing on Daya Bay and facing the whole country, with strong project undertaking capacity, with a newly signed order of 491 million yuan in 2019, which is 1.11 times of the operating income, contributing to the steady growth of the company's business in 2020. The company has plenty of cash. By the end of 2019, the monetary capital was 513 million yuan, and the transactional financial assets were 370 million yuan, totaling 873 million yuan, accounting for 72.39% of the total assets at the end of the period, and the cash income ratio was 1.97 times. At the same time, the company's asset-liability ratio is low, only 23.96% in 2019, with no interest-bearing liabilities. In addition, the company's cash flow is excellent. The company's operating net cash flow for four consecutive years from 2017 to 2019 is positive, which is 85 million yuan, 94 million yuan and 95 million yuan respectively, which is the same as the return net profit of the same period, and the company's growth is supported by cash flow.

Investment suggestion: the company's operating income from 2020 to 2022 is expected to be 452 million yuan, 499 million yuan and 578 million yuan respectively, with growth rates of 2.12%, 10.47% and 15.77% respectively, and net profit of 118 million yuan, 139 million yuan and 167 million yuan respectively. The dynamic PE was 38.8,32.9 and 27.4 times, and the dynamic PB was 4.4,4.0and 3.5times, respectively. The company is the forerunner of the land and space planning industry, A shares of the first land and space planning, with qualifications, talent and experience and other competitive advantages, sound performance, full orders, growth prospects. We cover the company for the first time, giving the company an investment rating of "increasing its holdings-A", with a 6-month target price of 58.85 yuan, corresponding to a forecast PE of 50 times in 2020.

Risk tips: macroeconomic fluctuations; epidemic control is not as expected; policy promotion is not as expected; infrastructure investment is declining; personnel wastage; industry competition aggravates risks.