Events:
The company released its semi-annual report for 2020 on Aug. 17, with operating income of 284 million yuan in the first half of the year, down 22. 24% from the same period last year, and net profit belonging to the parent company was 27.9354 million yuan, down 12.95% from the same period last year.
Comments:
Affected by the epidemic to a limited extent, the company's gross profit increased steadily. The company's operating income in the first half of the year was 284 million yuan, down 22.24% from the same period last year, and the net profit attributed to the parent company was 27.9354 million yuan, down 12.95% from the same period last year. Among them, the company achieved revenue of 120 million yuan in the first quarter, an increase of 22.40% over the same period last year, and revenue of 164 million yuan in the second quarter alone, a decrease of 38.52% over the same period last year. Due to the impact on the progress of the epidemic project, the company's EPC revenue during the reporting period lagged behind normal conditions. However, the company continues to improve its management ability. During the reporting period, the gross profit margin of the municipal garden project was 53.49%, which was 14.12% higher than that of the same period last year, and 1.40pct was higher than that of the same period last year. And with the continuous improvement of the epidemic situation in the location of the project, the influencing factors of the project schedule are gradually eliminated, the impact on the company's annual operation is limited, and the profit is expected to be repaired gradually.
Vigorously carry out EPC projects and have plenty of projects on hand. The company has been engaged in the general contracting business of landscape architecture projects since 2017 and enjoys a certain popularity. During the reporting period, the revenue of the EPC project accounted for 76.76%. In 2020, the company successively signed the contract for the EPC project of Yangjiahu and its surrounding ecological restoration project in Nanchang Airport Economic Zone, and the contract for greening EPC on both sides of Nanchang Jinshan Avenue, with a total amount of 546 million yuan. And the company won the bid for Chuanchang River Landscape Construction Project (county section) EPC general contract project on July 23, with a project amount of 80.51 million yuan. The second half of the year is expected to take advantage of the rush season to continue to expand the number of orders to provide protection for the annual performance.
We will continue to increase capital in Manmeng culture and focus on the development of literature and tourism industry. On August 10, the company increased its capital to Manmeng Culture by stages with its own capital of 25 million yuan. After the capital increase is completed, it will hold 30.00% of its equity. In 2020, Manmeng Culture transformed a total of 1336 hotel rooms, with the help of its animation copyright into the scenic area landscape design involved in the culture and tourism industry, expand the company's industrial chain and enhance profitability.
Cover for the first time, giving the company a "buy" rating. It is estimated that the company's revenue will grow by 14% in 2020-2022, and the EPS in 2020-2022 will be 0.65 yuan / 0.77 yuan / 0.87 yuan respectively.
Risk hints: the risk of recurrence of the epidemic in the second half of the year and the risk of a substantial increase in accounts receivable.