Core ideas:
Fine decoration penetration to enhance the sustainable development of hardcover bibcock, high profit and high turnover to help ROE maintain a high level. Batch fine decoration business is the most important business of the company, which now has the delivery capacity of 45000 sets of fine decoration houses every year. The growth momentum of the company is strong. The growth rate of homed net profit in 18max in 1919 was 45%, respectively. In 1919, the growth rate of ROE reached 25%, mainly due to the high turnover of the company. The company's business refund situation is good, the 19-year accounts receivable turnover rate is as high as 2.5 times, the net operating cash flow is 172 million yuan, and maintains the trend of growth year by year.
"small team" model to create a fine management system, improve quality, strict cost control to promote low cost rate. In the fine project management system, adopting the "small team" model, the company has an average of 16 typical projects in 19 years, and more than 700 labor teams are directly coordinated and dispatched by engineering projects. labor resources can be directly deployed among multiple projects in the same region, reflecting the company's good team management ability. The company has established an internal management system with the business process as the management axis, standardizing the labor system and procurement model, and finally transforming it into the ability of rapid turnover, high-quality operation and cost control. the rate of management expenses is maintained at about 4% and has a downward trend; the rate of sales and financial expenses is less than 1% for a long time, and the advantage of fine management is significant.
Vanke is the company's largest customer, actively expand new quality customers to adjust the income structure. The company's main customer is Vanke, which is a high-quality customer among large real estate developers. The phenomenon of "dragging the debt" is less, and the company's payback is better, thus strengthening the company's own cash flow. The company's material procurement is mainly focused on decoration auxiliary materials, with strong autonomy and high gross profit. In recent years, in order to enhance the business layout, reduce business risks, actively adjust its customer structure, and actively increase its market share among customers, the number of non-Vanke real estate orders signed by the company in 19 years has increased by 44.7% compared with 17 years.
Investment advice: as the company actively expands new customers and increases its share of customers, the company's 20-22 net profit is expected to be 2.29 million yuan, respectively, with a year-on-year growth rate of 25.0%, 37.4% and 31.2%, respectively. Considering the good cash flow of the company, the FCFF absolute valuation model is used to calculate the corresponding reasonable value of 63.47 yuan per share, which is given a "buy" rating.
Risk tips: major customer cooperation and development of new customers are not as expected; fine decoration development is not as expected.