Landscaping service provider throughout the industry chain, innovating operating models to help future development

Jinpu Garden is a listed company with park city construction as its core. It continues to develop around the three major businesses of landscape engineering construction, landscape design, and sales of seedlings and building materials. As the status of landscaping in human social life continues to rise, with its five-in-one operation model focusing on “water, road, green, landscape and city” and excellent R&D level, the company has great potential in the period of industry opportunities. We expect the company's revenue for 2023-2025 to be 1.03, 1.23 billion yuan, and 1.28 billion yuan, respectively, with a year-on-year growth rate of 5.2%, 10.2%, and 13.3%; net profit of the return mother's net profit of 0.9, 1.0, and 130 million yuan, with a year-on-year growth rate of 15.3%, 18.1%, and 23.2%; diluted EPS is 0.55, 0.65, and 0.80 yuan respectively. The current stock price corresponds to PE of 22.1, 18.7, and 15.2 times. For the first time, a “buy” rating was covered.

Focus on small to medium city projects and optimize the industrial structure to ensure future scale growth

The company focuses on county economic development. It has successfully completed project implementation in more than 10 county-level cities outside of Jiangsu Province and has received a good reputation, laying a solid foundation for the future rolling development trend of many cities under construction, reserve and negotiation.

At the same time, the company has comprehensive practical ability to improve the overall urban ecological environment. According to statistics, 39 new major orders (greater than 30 million yuan) were added in 2018-2022, of which EPC projects accounted for 70%. Such large-scale integrated construction and design projects can expand the company's business, expand market share, establish an industry position, and ensure continuous revenue growth.

Revenue is rising steadily, and the level of profit is leading the industry

Revenue for 2022 was 980 million yuan, up 1.8% year on year; revenue for the first quarter of 2023 was 160 million yuan, up 9.2% year on year, achieving a steady increase in revenue. The company's net interest rate for the first quarter of 2023 was 15.3%, an increase of 6.6 percentage points over the previous year. Judging from the change in return on net assets, ROE (dilution) fell to 6.8% in 2022 due to the increase in registered capital issued by the company's IPO, a decrease of 7.7 percentage points compared to 2019, but compared with comparable companies in the industry, the profit level was significantly higher than the average of peers.

Increased efforts to return funds have improved cash flow

In 2022, the company increased its repayment efforts. The total repayment volume increased by more than 50% year on year, net operating cash flow of -65 million yuan, an increase of 55% over the previous year, and net cash flow for the first quarter of 2023 was -145 million yuan, up 26.8% year on year. The gradual improvement in cash flow helped to continuously strengthen the company's ability to withstand risks.

Risk warning: the scale of market development falls short of expectations, risk of accounts receivable returning, risk of project commencement and completion.