The company recently released a report for the third quarter of 2020, with operating income of 3.211 billion yuan in the first three quarters, an increase of 95.84% over the same period last year. The net profit of the parent company was 98 million yuan, an increase of 120.80% over the same period last year. Comments are as follows:
The company has sufficient orders on hand, which can effectively support the high performance growth in the future. In the first three quarters, the amount of new orders signed by the company was 3.3 billion yuan, down 45.84% from the same period last year, or the newly signed orders slowed down due to the epidemic. As the only state-owned listed company under the management committee of Chengdu High-tech Zone, the company has incomparable advantages in undertaking orders for related projects in Chengdu Tianfu International Airport Metro and Tianfu New area. At present, the amount of the company's on-hand orders is 12.995 billion yuan, an increase of 41.87% over the same period last year, and the revenue ratio of on-hand orders is 3.92, which provides a good support for the sustained high growth of income in the future.
Revenue continued to grow high, the high proportion of construction business led to a decline in gross profit margin Q3 single-quarter revenue of 1.283 billion yuan, an increase of 72.79% over the same period last year, and the growth rate has exceeded 60% for three consecutive quarters.
Taken together, the company achieved 3.211 billion yuan in revenue in the first three quarters, a substantial increase of 95.84 percent over the same period last year. In the first three quarters, the company's gross profit margin was 9.95%, down 2.77 percentage points from the same period last year, or due to a substantial increase in construction business with low gross margin, while futures and real estate rental businesses with high gross margin are not the company's core main business and are expected to basically cease to grow in the future.
The scale effect of the decline in the expense rate is significant, and it is expected that the progress of fixed increase will continue to accelerate the expense rate of 4.77% in the first three quarters, a sharp drop of 3.67 percentage points compared with the same period last year. Among them, the rate of sales expenses was 1.89%, down 3.27% from the same period last year. This is mainly due to the fact that some of the futures brokers were affected by the epidemic and the expenses such as depreciation and amortization of hotel services were transferred from sales expenses to operating costs in accordance with the new income criteria, so the company's gross profit margin also decreased. The rate of management expenses was 2.17%, down 1.49% from the same period last year, mainly due to the rigidity of expenditure, with significant scale effect; the rate of financial expenses was 0.6%, up 0.97% from the same period last year, mainly due to the decline in the rate of return on capital and the increase in the scale of borrowing; the rate of R & D expenditure was 0.12%, up 0.12% from the same period last year. In the first three quarters, the company made provision for asset impairment and credit impairment losses totaling 24 million yuan, an increase of 21 million yuan over the same period last year, or due to an increase in bad debt losses on accounts receivable. Taken together, the net profit in the first three quarters was 98 million yuan, an increase of 120.80% over the same period last year. Of this total, the deducted non-net profit was 93 million yuan, an increase of 111.07% over the same period last year.
Net operating cash outflow and slight decrease in asset-liability ratio
The company's cash-to-cash ratio was 0.9529, an increase of 34.08% over the same period last year, mainly due to a substantial increase in cash received from the sale of goods and services, while cash-to-cash ratio was 0.8329, an increase of 24.77% over the same period last year, mainly due to a substantial increase in cash paid for goods and services. In the first three quarters, the net operating cash flow decreased by 83 million yuan, or 109.54%, compared with the same period last year, mainly due to the decrease in futures currency margin cash flow compared with the same period last year; the net investment cash flow increased by 537 million yuan, or 115.78%, over the same period last year, mainly due to the increase in net transactions of financial assets of the company's holding subsidiary, Beit Futures Co., Ltd. The company's asset-liability ratio was 80.92%, down 0.29 percentage points from the beginning of the year.
Investment suggestion
The company achieved high growth in revenue and net profit in the first three quarters. As the only state-owned listed company under the management committee of Chengdu High-tech Zone, it has obvious advantages in accepting relevant orders. At present, the company has sufficient orders on hand, which provides a good support for the sustained high growth of revenue in the future. We maintain the company's EPS of 0.66,0.96,1.21 yuan per share in 2020-2022, and the corresponding PE of 12, 8, 7 times, maintaining a "buy" rating.
Risk tips: the recovery of fixed asset investment is not as expected; business progress is not as expected; newly signed orders are not as good as expected