"small and beautiful" characteristic architectural decoration company. The company's full name is Decoration Co., Ltd., founded in 1999, headquartered in Qingdao, Shandong Province. The company is mainly engaged in decoration, housing construction, municipal business, can provide integrated design, procurement and construction services. In the first half of 2023, the company's revenue from decoration / housing construction / municipal business accounted for 47.4%, 33.9% and 15.1% respectively. The company continues to plough the field of urban renewal, forming the "troika" of old residential district renovation, historical building protection and renovation, and municipal infrastructure construction business. In the first half of 2023, the proportion of new contracts signed for more than three types of projects reached 53.3%.
Qingdao urban renewal and rapid release of urban construction demand. In 2022, Qingdao put forward a three-year action plan for urban renewal and urban construction, focusing on eight major actions: protection and renewal of historic urban areas, development and construction of key inefficient areas (parks), reconstruction and construction of old villages in old cities, construction of municipal facilities, construction of transportation infrastructure, subway construction and development and construction along subway lines, parking facilities construction and park city construction. In 2023, Qingdao plans to renovate 473 old residential areas, + 48.7% compared with the same period last year, plans to complete an investment of 6.48 billion yuan, + 63.6% compared with the same period last year, plans to promote 85 urban village renovation projects, + 193.1% compared with the same period last year, and plans to complete an investment of 17.5 billion yuan, + 42.7% compared with the same period last year.
The company will seize the policy opportunity to create a brand with urban renewal characteristics. The company relies on the advantage of the whole industry chain to actively develop urban renewal business. The company is qualified to cover all areas of old residential district renovation, and can independently undertake old residential district renovation projects. 2023H1 company has newly signed 957 million yuan for old residential district renovation projects, which is + 106.7% last year; and 390 million yuan for historical style building protection and renovation projects, which is + 43.0% compared with the same period last year. It is estimated that the local market share of the company's old community renovation projects can reach about 20%.
Fully develop existing channels and actively layout system doors and windows. In 2022, the company changed part of the fund-raising investment project to "system door and window research and development and intelligent manufacturing industrialization project". In 2023, two production lines in the second phase of the company's Decai Hi-Tech workshop were completed and put into trial operation. The company's door and window business started early, has its own R & D and design team and testing center, and can dock with the system door and window procurement needs of the company's traditional decoration customers. at the same time, the company layout and construction of C-end channels, cut into the stock room decoration consumption field.
Valuation and investment suggestions: infrastructure construction is faced with the problem of "lack of projects", "expanding domestic demand" calls for transformation projects, and "broad urban renewal" has become a key area of capital construction investment. The company has been ploughing the Qingdao market for a long time, based on local advantages, to create a brand with urban renewal characteristics, and is expected to continue to benefit from the rapid growth of market demand.
It is predicted that the company's parent net profit is 2.33 million yuan, and the earnings per share is 1.67, 2.01 and 2.33 yuan, and the corresponding share price is 9.8, 8.1 and 7.0x. Combined with the absolute valuation method and the relative valuation method, the reasonable value range of the company per share is 22.07-23.38 yuan, which is 35.65% 43.70% more than the current stock price. It is covered for the first time and given a "buy" rating.
Risk hints: the risk of macroeconomic situation change, the risk of policy change, the risk of market competition, the risk of high asset-liability ratio, the risk of collection of receivables, and so on.