1. Investment event
The company released its 2020 quarterly report that in the first three quarters of 2020, the company achieved operating income of 1.062 billion yuan, down 8.89% from the same period last year, and realized a net profit of 149 million yuan, an increase of 12.22% over the same period last year. Non-net profit was deducted from 119 million yuan, an increase of 1.01% over the same period last year.
two。 Analysis and judgment
The performance was in line with expectations, the gross profit margin continued to grow steadily and the cash flow improved. 1) in terms of revenue: the company achieved operating income of 1.062 billion yuan in the first three quarters of 2020, down 8.89% from the same period last year.
Of this total, Q3 had an operating income of 414 million yuan in a single quarter, the same as the same period last year. 2) net profit: in the first three quarters of 2020, the company achieved a net profit of 149 million yuan, an increase of 12.22% over the same period last year, and a non-net profit of 119 million yuan, an increase of 1.01% over the same period last year. Of this total, Q3 returned to its mother in a single quarter with a net profit of 46 million yuan, down 4.17% from the same period last year. 3) Gross / net profit margin: in the first three quarters of 2020, the gross profit margin of the company was 28.06%, an increase of 2.43pct over the same period last year; and the net profit rate was 14.08%, an increase of 2.21pct over the same period last year. 4) expense rate: the expense rate during the first three quarters of 2020 is 14.59%, which is higher than the same period last year (0.86pct). Among them, the management expense rate was 14.18%, an increase of 0.66 pct over the same period last year, and the financial expense rate was 0.41%, an increase of 0.20pct over the same period last year. 5) in terms of assets and liabilities: accounts receivable and bills in the first three quarters of 2020 were 793 million yuan, down 11.79% from the same period last year, accounting for 24.31% of total assets and 4.42 pct compared with the same period last year; accounts payable were 658 million yuan, up 18.77% from the same period last year, accounting for 50.0% of liabilities, up 6.89% from the same period last year; and the asset-liability ratio was 40.34%, reducing 0.72pct over the same period last year. 6) cash flow: the company's operating cash flow was-46 million yuan, an increase of 32 million yuan over the same period last year, mainly due to the maturity and acceptance of the commercial acceptance bill received by the parent company last year; the cash flow of the company's investment activities was 91 million yuan, an increase of 89 million yuan over the same period last year and an increase of 5,659.82% over the same period last year, mainly due to the increase in net financial management and the recovery of Zhongheng's investment funds. The cash flow of the company's fund-raising activities was-125 million yuan, down-174 million yuan from the same period last year, down 354.0% from the same period last year, mainly due to the decrease in new bank loans in the current period compared with the same period last year and the repayment of bank loans.
The company takes engineering design as the core, focusing on the integration of layout and assembly building integrated design, which is recognized by front-line investment institutions. 1) the company added the 116 portfolio of the social security fund of the top 10 shareholders in the company's three quarterly reports, which is the first time that a first-tier investment institution has become a major shareholder of the company. 2) in the third quarter, the company won the right to the use of state-owned construction land in Wuhan Economic and technological Development Zone with its own funds of RMB 45.61 million. 3) the company has won many design awards in the first three quarters: the Kunshan project won the second prize in the BIM Application Competition held by China Survey and Design Association; the parent company won 19 first prize, 9 second prize and 5 third prize in the excellent survey and design of Suzhou urban and rural construction system in 2020, with a total of 33 awards.
3. A brief Analysis of Finance
The company's operating income and net profit have increased steadily since 2015. In the first three quarters of 2020, the company realized operating income of 1.062 billion yuan, down 8.89% from the same period last year, and realized net profit of 149 million yuan, an increase of 12.22% over the same period last year.
The expense rate during the company period has remained stable since 2020, with a slight increase in the first three quarters of 2014. The expense rate during the first three quarters of 2020 was 14.59%, which was higher than that of the same period last year (0.86pct). Among them, the management expense rate was 14.18%, an increase of 0.66 pct over the same period last year, and the financial expense rate was 0.41%, an increase of 0.20pct over the same period last year. In recent years, the company's gross profit margin and net profit margin have continued to increase slightly. In the first three quarters of 2020, the company's gross profit margin was 28.06%, an increase of 2.43pct over the same period last year; and a net profit margin of 14.08%, an increase of 2.21pct over the same period last year.
4. Investment suggestion
It is estimated that the EPS of the company from 2020 to 2022 will be 0.81 soybean 1.17 yuan per share, and the current stock price corresponding to the dynamic price-to-earnings ratio will be 13.37 soybean 9.26 times, maintaining the "recommended" rating.
Risk tips: the risk of a sharp decline in fixed asset investment; the risk that the recovery of accounts receivable is not as expected.