Event: on the evening of October 23, 2020, the company released its three-quarter report in 2010. in the first three quarters, the operating income was about 515 million yuan, down 21.91% from the same period last year, and the net profit was about 93 million yuan, down 28.08% from the same period last year. the net profit after deducting non-return is about 94 million yuan, down 25.40% from the same period last year.
The performance exceeded market expectations and rebounded significantly in the third quarter.
The business recovered significantly in the third quarter, and the net operating cash flow in a single quarter reached the best level in history, continuously increasing investment in three-dimensional design of power grid BIM and R & D of cloud service products. In the third quarter of 2020, income growth reached 25.51%, and net profit growth reached 52.69%, which was significantly better than that in the first half of this year (income and net profit growth were-44.96% and-62.27%, respectively). The gross profit margin in the first three quarters of 2020 was 49.93%, an increase of 7.13 pct compared with the same period last year, mainly due to the improvement of the income structure. (the relevant sectors of power grid design are the current business focus, driven by the policy that three-dimensional design is required for new power transmission and transformation projects above 35kv, while the growth rate of power distribution business related to relatively low gross margin infrastructure and power reform is relatively low. In addition, the operating net cash flow inflow in the third quarter was 250 million yuan, the best level in a single quarter in history, making the operating net cash flow in the first three quarters of the first three quarters reached 177 million yuan, achieving a positive net cash flow in the first three quarters of nearly a decade, and the proportion of cash rebates reached 138.94%. The company vigorously promoted the recovery of accounts receivable, showing remarkable results, and the ability of "self-hematopoiesis" was greatly improved. In the first three quarters, the company invested 72 million yuan in R & D expenditure, an increase of 8.61% over the same period last year. In the face of declining revenue, the company still maintained its investment in self-controllable key BIM technologies and cloud service related products, and helped the company to transform its three-dimensional BIM underlying technology and cloud service model in the power grid and transportation fields under the background of domestic substitution of basic software at the industrial bottom level.
Maintain a "buy" rating. From 2020 to 2022, we estimate that the company will achieve income of 984 million yuan, 1.189 billion yuan and 1.48 billion yuan, and corresponding net profit of 267 million yuan, 324 million yuan and 391 million yuan respectively, and corresponding PE of 24.8,20.4 and 16.9 times respectively, maintaining the "buy" rating.
Risk tips: the progress of power grid investment is not as expected; the progress of power reform is not as expected; the risk of bad debts of accounts receivable is increased; customer expansion is not as expected; competition is intensified, product competitiveness is declining; transportation and other industries are not as expected.