Main points of investment:
Maintain the "overweight" rating. 20H1 achieved an income of 9.603 billion yuan, a decrease of 9.21%, a net profit of 296 million yuan, a net profit of 3.13%, and a net profit of 282 million yuan after deducting non-return, with a decrease of 6.08%. The operation was significantly better than that of the first quarter, in line with market expectations. We judge that the landing of key projects is expected to drive the company's performance flexibility, raising the company's EPS in 2020-22 to 0.62 (+ 0.13,0.72 (+ 0.17,0.84) yuan, and proportionately raising the target price to 15 yuan.
Major projects drive Q2 sales to return to positive growth. It is estimated that the sales of commercial concrete of 20H1 Company is about 20.39 million square meters, down 8% from the same period last year, but the sales volume in the second quarter alone reached 1453.5 million square meters, an increase of 1.21%, returning to growth. According to the data disclosed by the company, in the second quarter, the company signed contracts for a number of major projects, such as the strategic procurement project of Nanjing, the third construction bureau of China Construction Bureau, and the acceleration and renovation project of the Inner Ring Line in Xiangyang, Hubei Province. during the period, the number of contracts reached 4194.8 square meters, an increase of 51.8% over the same period last year. We judge or predict that the company's commercial concrete sales are expected to exceed expectations in the second half of the year.
It has achieved remarkable results in reducing the cost and control fees. It is estimated that the average price of 20H1 commercial concrete is about 458.2 yuan per square meter, which is reduced by about 6 yuan, but thanks to the company's optimization of budget structure, the release of management and control measures to reduce costs and efficiency, and the strengthening of cement, sand and gravel collection, manufacturing costs and expenses have decreased significantly. It is estimated that the square gross profit in the first half of the year is about 49.7 yuan, with a net interest rate of 3.65%, and a 0.5pct increase.
The balance sheet improved. At the end of the period, the company had 3.12 billion yuan in cash on hand, an increase of more than 600 million yuan over the same period last year, short-term loans dropped sharply from 1.63 billion yuan at the end of the second quarter of 1919 to 350 million yuan, long-term loans decreased from 650 million yuan to 35.4 million yuan, and the final asset-liability ratio was about 60.08%, a sharp decline of about 8.05pct compared with the same period last year. Balance sheet optimization is significant.
Risk hint: the landing of major projects is lower than expected, and the price of raw materials increases.