Event description
The company released its semi-annual report for 2020, with an operating income of 843 million yuan in the first half of 2020, a decrease of 18.91% over the same period last year, and a net profit of 19 million yuan, a decrease of 64.83% over the same period last year.
Event comment
Affected by the epidemic, the company's revenue and performance have declined. In the first quarter, affected by the epidemic, the business that the company has undertaken has a low operating rate and a decline in operating income; in the second quarter, with the epidemic links and economic recovery, the company stepped up efforts to resume work and production, and business development was resumed. In terms of revenue, 2020H1 revenue decreased by 18.91%, mainly due to a significant decrease in decoration engineering business income, 2020H1 realized income of 594 million yuan, a decrease of 27.49%; design business income also declined, 2020H1 realized income of 219 million yuan, a decrease of 1.03%; the company's soft installation business and other businesses achieved income of 30 million yuan and 1 million yuan respectively, accounting for 3.52% and 0.13% of the first half income respectively. In terms of performance, the net profit attributed to 2020H1 was 19 million yuan, a decrease of 64.83%. The decline was mainly due to the contraction of the business scale, resulting in a decrease in gross profit of 16.96% to 178 million yuan, and the expense rate and credit impairment loss rate increased 3.72pct and 0.82pct respectively during the superposition period. In a single quarter, 2020Q2 achieved an operating income of 459 million yuan, a decrease of 16.64%, and a net profit of 6 million yuan, a decrease of 79.29%.
The gross profit margin increased slightly, and the increase of expense rate and credit impairment loss rate led to a decrease in the attributable net profit rate.
The gross profit margin of 2020H1 is 21.08%, with the same increase of 0.50pct, but the net profit rate of attribution is 2.21%, which is mainly due to: 1) the expense rate increased from 3.72pct to 15.25% during the period, in which the sales expense rate, management expense rate, R & D expense rate and financial expense rate increased respectively-0.07pct, 0.88pct, 2.24pct and 0.67pct to 1.61%, 5.21%, 5.96% and 2.47%, respectively. 2) the loss rate of credit impairment increased by 0.82pct to 3.91%.
Strengthen the management of receipt and payment, and change the operating cash flow from negative to positive. 2020H1 realized a net operating cash inflow of 46 million yuan, up from-79 million yuan in the same period last year, mainly due to strengthening the management of receipts and payments to customers / suppliers in the current period. the cash-to-cash ratio and cash-to-cash ratio in the first half of the year were 111.89% and 81.16% respectively, with year-on-year changes in 11.41pct and-11.09pct.
The epidemic led to a decline in newly signed orders in the first half of the year, narrowing the decline in the single quarter. The company's 2020H1 signed a new order of 939 million yuan, a decrease of 44.11%. In a single quarter, 2020Q2 achieved 563 million yuan in newly signed orders, a decrease of 28.92%, narrowing 28.73pct compared with the previous quarter, and may be further repaired as the economic recovery continues. According to different industries, the newly signed engineering order of 2020H1 is 549 million yuan, with a decrease of 55.22%, and the newly signed design order is 391 million yuan, with a decrease of 14.22%. It is estimated that the company's EPS in 2020-21 will be 0.40,0.56 yuan respectively, corresponding to the stock price PE of 26.62,18.82 times in 2020-8-26, maintaining a "buy" rating.
Risk hint
1. Risk of tightening real estate policy
two。 The risk that accounts receivable cannot be recovered.