The company's business performance grew steadily in 2019, and domestic and foreign orders were overwhelmed.
The company released its annual report in 2019, with an operating income of 2.17 billion yuan, an increase of 21.71% over the same period last year, and a net profit of 129 million yuan, an increase of 29.17% over the same period last year. During the reporting period, the company actively laid out the deep integration of rural water conservancy basic network, information network and service network to realize the integrated solution of agricultural and water projects in the whole industry chain. At the same time, the company has actively developed domestic and foreign markets, successively obtained high-quality large orders in Tongliao, Inner Mongolia, Jiuquan, Gansu, Litong of Ningxia and Shaya of Xinjiang, and gradually expanded its international market share by integrating resources in Israel. In addition, the company invested 49.59 million yuan in R & D in 2019, an increase of 27.45% over the same period last year, laying a good foundation for new product research and development and improving the level of science and technology.
COVID-19 epidemic delayed the construction of the project, so that Q1 performance in 2020 was lower than expected.
The company issued a 2020Q1 performance forecast, and estimated that the net profit of returning home will be 10.17 million yuan to 00, 000 yuan, down 80% 100% from the same period last year. Affected by the COVID-19 epidemic across the country, the bidding progress of local government customers has been delayed compared with previous years, procurement and supply and construction site organization have been restricted, and marketing services have been hindered due to the inconvenience of transportation and logistics, resulting in a sharp decline in revenue and net profit in the first quarter. With the gradual improvement of the domestic COVID-19 epidemic, it is expected that the government bidding, procurement, construction and other business will also return to normal. At the same time, the postponement of business is not the same as the suspension of business, we believe that the company will speed up the progress of the project to minimize losses.
COVID-19 epidemic may accelerate to increase the concentration of the industry, the company's leading position is further consolidated, and is expected to accelerate to seize market share.
Since 2016, under the background that the state has put forward higher requirements for the construction, management and transportation of farmland water-saving projects and the introduction of PPP model in the field of farmland water-saving construction, the industry will be more conducive to leading enterprises with large brand influence, construction experience, strong financing capacity and high level of operation and maintenance management. Secondly, it is difficult for small agricultural service enterprises to spend the problems caused by the COVID-19 epidemic as relatively perfect as the group enterprises, and the industry concentration may accelerate.
At the same time, the company continues to consolidate its leading position in the industry, and is expected to produce excellent synergy in the field of intelligent water service network through cooperation with Beijing Huitu Technology, so as to improve the company's profitability, and improve the overall operation efficiency and management level by introducing IBM digital management system. Therefore, it is expected that with the control of COVID-19 epidemic and the normal development of government projects, the company, as the industry leader, is expected to accelerate the landing of follow-up orders, and the company's performance is expected to increase steadily from 2020 to 2022.
Profit forecast and investment advice:
Due to the delay of project construction due to the epidemic in the first quarter of the company, we raised the project cost of the company in 2020, taking into account the comprehensive impact of epidemic prevention and control on the company in 2020, and raised the rate of sales and management expenses in 2020. As a result, we adjusted the company's revenue from 2020 to 2021 from 3.441 billion to 2.7303.395 million. The net profit of homing has been adjusted from 330 amp 490 million to 181 pm 245 million. From 2020 to 2022, it is estimated that the company will achieve an income of 27.30, 33.95, 4113 million, an increase of 26.07%, 24.35%, 21.14%, 1.81%, 2.45, 331 million, and 40.03%, 35.10%, 35.09%, respectively, and the corresponding EPS is 0.23, 0.311, 0.41 yuan, and the current PE is 21x/16x/12x, respectively. Taking into account the company's broad space for development and steady growth in performance, continue to give a "buy" rating!
Risk tips: 1, national policy changes; 2, natural disasters; 3, the landing of the order is not as expected.