Events:
The company issued a major asset purchase and related party transaction report on January 4. With regard to this restructuring transaction, the company intends to buy 50% of Huafa Jinglong held by Huafa shares and 40% of Jiantai Construction held by Huawei Investment. The total amount of the transaction is 309 million yuan.
Comments:
Inject high-quality construction assets to solve the problem of inter-industry competition. In August 2020, Huashi Holdings acquired 29.99% of the shares of the company, and the actual controller of the company was changed to Zhuhai SASAC. Before this reorganization, the company's main business is engaged in architectural decoration engineering business. Through this restructuring, the company will introduce high-quality construction and decoration engineering business assets of Huafa shares to further enhance the profitability of listed companies, optimize the efficiency of resource allocation, and enhance the ability of listed companies to resist industry risks.
The acquisition agreement thickens the company's performance and provides a growth guarantee for the gambling agreement. According to the company's annual report, Huafa Jinglong and Jiantai Construction achieved net profits of 34.5 million yuan and 7.42 million yuan respectively in the third quarter of 2020, accounting for 110% of the net profit of Super maintenance shares in the first three quarters, so this restructuring will greatly increase the company's performance. In addition, Huafa shares promised in the trading announcement that the net profit from 2021 to 2025 would not be less than 51.6 million yuan, 52.7 million yuan, 56.3 million yuan, 58.1 million yuan and 59.8 million yuan respectively; Jiantai Construction promised that the net profit from 2021 to 2025 would not be less than 2830 million yuan, 2900 million yuan, 2970 million yuan, 3010 million yuan and 2870 million yuan respectively.
The betting agreement between the two sides provides a clear guarantee for the corresponding performance growth.
The success of winning the contract has spread frequently, stabilizing the leading position of the decoration and decoration industry in the Dawan area. Wei Ye shares have won a number of projects since August 2020, including the second-line flower arrangement in Luohu, Shenzhen.
The decoration and decoration project of shantytown renovation project, the second phase project of Zhuhai International Convention and Exhibition Center, the design and construction general contract project of the renovation and upgrading project of Haiyun Square interior and two outer streets, etc., won a total of 267 million yuan in three months, accounting for 19.2% of the company's reported revenue in the third quarter of 2020. Among them, the Zhuhai International Convention and Exhibition Center project is the first major landmark project undertaken by the company in Zhuhai, with a winning bid amount of 128 million yuan, which will help the company to assemble and manufacture the elevation end and cultivate a high-quality regional market.
Downgrade the profit forecast and give the company an "overweight" rating. The company's business was greatly affected by the epidemic, and the credit impairment loss in the third quarter was 14.29 million yuan, which affected the company's profits to a large extent. It is estimated that the EPS from 2020 to 2022 will be 0.15 yuan / 0.34 yuan / 0.40 yuan respectively, lowering the target price to 12.00 yuan to maintain the company's "overweight" rating.
Risk hint: the risk that restructuring progress falls short of expectations, performance forecasts and valuation judgments fall short of expectations