Focus on park city construction, steady revenue growth. The company was founded in June 1998, is a comprehensive garden enterprise with park urban construction as the core, the main business involves the integration of design and construction, landscape engineering construction, landscape design, engineering construction maintenance and so on. In 2022, the company realized main business income of 976 million yuan, an increase of 1.84% over the same period last year, a net profit of 75 million yuan, a decrease of 11.40% over the same period last year, Q1 in 2023, an increase of 9.15% over the same period last year, and a net profit of 22 million yuan, an increase of 1.35% over the same period last year.

Form a "water, road, green, scenery, city" business model, focus on the development of small and medium-sized cities. In practice, the company has formed a five-in-one urban ecological environment improvement business model of "water, road, green, scenery and city", providing customers with complete solutions and landing synchronously in all directions. The company focuses on small and medium-sized cities and promotes the development of county economy. at present, it can provide services for more than 10 county-level cities, and plans to expand 2-3 counties every year in the future. The company's business model can make the company have strong stickiness with customers and help the company to obtain orders continuously and stably. In 2022, the company won the bid and the contract value of newly signed engineering and design projects was nearly 2 billion yuan.

With the ability of integration of design and construction, design and construction team cooperate efficiently. The company has established the integrated management ability of planning and design, construction, seedling planting and follow-up maintenance, and has integrated the advantages of research and development, planning, design and construction through long-term practice accumulation. it has formed an integrated management model of design and construction with high efficiency and strong professional cooperation. The company has a team of more than 150 designers and perfect design business qualifications, as well as more complete design and construction qualifications in the industry, creating an efficient and cooperative team that can meet the needs of customers.

Speed up the return of funds, and cash flow has improved. The company continues to increase the recovery of accounts receivable. In 2022, the total amount of money returned increased by more than 50% compared with the same period last year, and the net cash flow generated by operating activities was-65 million yuan, which increased by 54.58%. The net cash flow generated by Q1 operating activities in 2023 was-145 million yuan, an increase of 26.8% over the same period last year.

The company is expected to benefit from policy support for the transformation of urban villages in big cities. In July 2023, the National standing Committee examined and approved the "guidance on actively and steadily promoting the Transformation of villages in cities", which will actively and steadily implement the transformation of villages in cities and combine the transformation of villages in cities with the construction of indemnificatory housing. and encourage and support the participation of private capital, we believe that the transformation of urban villages should be designed and planned first. At the same time, the company has many qualifications, such as Grade A for landscape engineering design, Class B for engineering design in the construction industry, Class B for urban and rural planning, and is expected to benefit first.

Profit Forecast: we estimate that the company's operating income from 2023 to 2025 will be 1.285 billion yuan respectively, and the net profit of returning to the mother will be 0.93 Universe 1.11 trillion yuan respectively, corresponding to 24.42x/20.49x/18.37x, which will be covered for the first time and will be rated as "overweight".

Risk tips: market development is not as expected, accounts receivable is not as expected, profit forecast and valuation model is not as expected, and so on.