This report is read as follows:
The company actively promotes municipal projects such as river and lake governance / ecological restoration, and the research travel business will create a new profit growth point; convertible bonds will raise funds in place to ensure the smooth progress of the business.
Main points of investment:
Maintain caution to increase holdings. H1 revenue 1.26 billion yuan (- 13%), return home net profit 97 million yuan (- 29%) slightly lower expectations; due to the epidemic affected by the project started late / science, education, culture and tourism business subsidiaries in Wuhan / adjust the scale and speed of business, downgrade the forecast for 2020-21 EPS to 0.54max 0.63 yuan (formerly 0.61 pound 0.7 yuan) growth rate of 1318%, forecast EPS of 0.74 yuan growth rate of 17% in 2022 The target price was lowered to 6.21 yuan, corresponding to 11.5 9.9 PE in 2020-22, maintaining a cautious increase.
Q2 revenue / net profit growth picked up, gross / net interest rate fell slightly. 1) Q1/Q2 single-quarter revenue growth rate-38.3 pesque 2.7%, net profit growth rate-169.6 Mercer 8.2% bot 2) H1 gross profit margin 20.16% (- 0.01pct) basically stable; net profit 7.57% (- 1.81pct) due to increase in expense rate 3) the four rates are 9.54% (+ 2pct), in which the rate of management expenses is 4.86% (+ 0.79pct) / R & D 1.85% (+ 0.88pct) / sales is 0.36% (+ 0.36pct) / financial 2.46%; 4) the net operating cash flow is 49 million yuan (107 million yuan in the same period last year); 5) the credit impairment loss is 14 million yuan (- 2 million yuan); and 5) the asset-liability ratio is 41.94% (+ 2.48pct).
Promote research and study travel business to create new profit growth points, raise funds in place to ensure the landing of the project.
1) the newly signed order of H1 is 610 million yuan (- 66.7%), because the company still insists on taking the initiative to strictly control the risk and scale of large-scale municipal projects; by the end of H1 has signed an unfinished order of 6.61 billion yuan and Q2 has not yet won the bid, the total guarantee multiple is about 355 million times. 2) Deep ploughing traditional landscape design and construction will expand municipal projects such as river and lake management / ecological restoration / sponge city. 3) on the basis of the original travel team, acquire Xuezhi Wuda, a research travel operator, systematically promote the business development of teaching and learning travel, H2 company will actively carry out research / off-campus practical activities, etc.; 4) 950 million yuan has been raised by issuing convertible bonds (the initial conversion price is 5.76 yuan / share), which provides a strong guarantee for the landing of the project on hand. And the company's asset-liability ratio is low, it is relatively easy to obtain bank credit financing, and the performance is resilient. 5) according to the Economic Observer, the operating Guide to the Cooperation Model between Government and Social Capital is expected to be published.
Catalyst: enhanced policy support for ecological and environmental protection, PPP policy repair, order promotion acceleration and other risks such as slower fiscal expenditure, lower-than-expected order promotion, accounts receivable risk, etc.