Event description
The company released the annual report in 2019 and the quarterly report in 20120. in 2019, the company realized an increase of 9.17% in revenue of 2.511 billion yuan and 16.67% in net profit attributable to 133 million yuan. the company plans to pay out 3 yuan for every 10 shares and increase 5 shares for every 10 shares; in the first quarter of 2020, the company achieved a revenue of 385 million yuan and a decrease of 21.47%, and realized a net profit of 13 million yuan and a decrease of 47.06%.
Event comment
The explosion of soft equipment contributed to revenue growth in 2019. The company's revenue increased by 9% in 2019, mainly due to the outbreak of soft equipment business (revenue of 77 million yuan and an increase of 3345%), while decoration engineering (1.912 billion) and design business (520 million) increased by 5.4% and 8.7%, respectively. The performance growth rate was higher than that of income mainly affected by the reduction of bad debt losses. From a quarterly point of view, the company's 2019Q1-Q4 realized revenue of 490 million yuan, 550 million yuan, 620 million yuan and 850 million yuan respectively, up 8.1%,-8.6%, 22.7% and 15.0% respectively, and realized attributable net profit of 20 million yuan, 30 million yuan, 40 million yuan and 40 million yuan respectively, up 22.7%, 13.1%, 30.4% and 3.0% respectively.
In 2019, the attributable net interest rate increased slightly and the net operating cash flow inflow. In 2019, the company's gross profit margin decreased by 19.55% 2.42pct, which was mainly affected by the same reduction of 3.65pct to 10.10% in decoration engineering and 0.87pct to 52.95% in design business. During the period, the expense rate (including R & D expenses) increased by 1.21pct to 11.56%, mainly due to the increase in management, sales and financial expense rates with increases in 0.34cpt (increase in employee salary), 0.18pct and 0.70pct (interest deduction by issuing convertible bonds) to 8.33%, 1.58% and 1.65%, respectively. The loss rate of asset impairment decreased by 3.81pct to 1.64% (loss of bad debts decreased by 84 million yuan). The attributable net interest rate is 5.31% and 0.34pct.
In 2019, the company achieved a net inflow of operating cash of 160 million yuan, and the income-to-cash ratio changed 5.78pct and-4.15pct to 98.25% and 87.45% respectively compared with the same period last year. 2020Q1's gross profit margin was reduced by 0.96pct to 19.32%, and the attributable net profit rate was reduced by 1.58pct to 3.27%, with a net operating cash outflow of 40 million yuan.
New signings grew rapidly in 2019, and abundant orders ensured a steady increase in revenue. In 2019, the company's newly signed orders of 4.029 billion yuan increased by 29.38%, of which engineering and design increased by 41.81% and 6.74% to 2.85 billion and 1.179 billion respectively. By the end of 2019, the outstanding contracts for engineering, design and total outstanding contracts were 2.855 billion, 2.274 billion and 5.129 billion yuan respectively, more than 1.5,4.4 and 2.0 times the corresponding income in 2019, laying a solid foundation for sustained revenue growth in the future. It is estimated that the company's EPS in 2020-21 will be 0.88,1.06 yuan, corresponding to the stock price PE of 16.01,13.30 times on 2020-4-29, maintaining a "buy" rating.
Risk tips: 1. The regulation and control of real estate is further tightened; 2. The payback of the project is not as expected.
