On January 29, the company announced its 2020 results forecast that the net profit of returning home is expected to reach 1200-17 million yuan, down 75% and 82% from the same period last year. The increase in cost and management financial expenses, the provision of depreciation, and the decline in non-recurrent profit and loss led to a decline in performance. The decline in performance is mainly due to the low gross profit margin of the company's new construction projects in 2020 and the impact of the COVID-19 epidemic, the slowdown in the construction of the company's prefabricated construction projects, the hindrance of personnel mobility, the extension of the construction period and the rise in costs. In 2020, compared with the same period last year, the management expenses increased compared with the same period last year, mainly due to the consolidation of the wood-plastic R & D building, the commissioning of Jiangsu Suqian factory and the change in the number of years of depreciation of fixed assets. In 2020, compared with the same period last year, financial expenses increased compared with the same period last year, mainly due to the increase in the amount of financing needed for business development compared with the same period last year. In 2020, the amount of non-recurrent profits and losses belonging to shareholders of listed companies is about 10.5 million yuan (21.5 million yuan in 2019), mainly including government subsidies included in the current profits and losses, profits and losses on disposal of non-current assets, and so on.

The company won the title of the first batch of "specialized and special new" enterprises in Beijing in 2020. The Beijing Municipal Bureau of economy and Information Technology announced that "Beijing 2020" specializes in new "small and medium-sized enterprises" (the first batch of list), and China Railway prefabricated Construction Co., Ltd. won the title of the first batch of "specialized and special new" enterprises in 2020. And recently obtained the "Beijing" specialization and special new "small and medium-sized enterprise certificate". General Secretary Xi Jinping presided over the fifth meeting of the Central Financial and Economic Committee on August 26, 2019, pointing out that it is necessary to give full play to the spirit of entrepreneurship and craftsmanship and cultivate a number of "specialized and innovative" small and medium-sized enterprises. In accordance with the requirements of the "guidance on promoting the Development of small and medium-sized Enterprises in Beijing" (Jingjingxinfa (2019) No. 86), the Beijing Municipal Bureau of economy and Information Technology organized and carried out the selection of "specialized and special new" enterprises. "specialization is very new"

Enterprise refers to the industrial small and medium-sized enterprises with the characteristics of "specialization, refinement, characteristic and novelty".

The company employs a new chief accountant and deputy general manager. 1) on January 22, the company announced that the board of directors decided to appoint Mr. Li Hong as the chief accountant of the company for a term of office from the date of deliberation and adoption at the thirtieth meeting of the third session of the board of directors to the expiration of the third session of the board of directors. Li Hong, born in 1973, Chinese nationality, male, bachelor degree. He served as Chief of Finance Section of China Railway third Bureau Group Co., Ltd from July 1992 to December 2005, Chief accountant of Bridge and Tunnel Engineering Branch of China Railway third Bureau Group Co., Ltd from December 2005 to August 2010, Deputy Minister of Finance Department of China Railway Shanghai Engineering Bureau Group Co., Ltd from November 2010 to June 2016, and Finance Minister of China Railway (Shanghai) Investment Group Co., Ltd from July 2016 to December 2020. 2) on December 30, the company announced that the board of directors decided to appoint Mr. Su Xiaoguan as deputy general manager of the company for a term of office from the date of examination and approval at the 29th meeting of the third session of the board of directors to the expiration of the third session of the board of directors. Su Xiaoxian, born in 1980, Chinese nationality, male, master's degree. From June 2005 to May 2014, he served as the technical standard preparation engineer, senior engineer and director of the bidding room for key projects in the Marketing Department of China Railway sixth Bureau Group Co., Ltd. during this period, he served as the deputy head of the Hanchang Line Command and the early preparation Group of the Zhangtang Line Command of China Railway sixth Bureau Group Co., Ltd. From May 2014 to November 2020, he served as the Manager of the Planning and Development Department and the Director of the Enterprise Reform Department of China Rallway Co., Ltd. during the period from October 2018 to December 2019, he served as a division-level researcher in the shareholder Management Department of the Capital Bureau of the State-owned assets Supervision and Administration Commission of the State Council.

Investment advice: maintain the overweight rating. The company's net profit from 2020 to 2022 is forecast to 0.14,0.90 and 130 million yuan, corresponding to price-to-earnings ratio of 228,35 and 24 times. The prefabricated construction industry is currently supported by policies, and the industry is in a period of high growth. The company's Jiangsu Suqian production base was successfully put into production in the first half of 2019, improving the capacity layout. The company has strong technical and order-taking ability; after the controlling shareholder becomes China Rallway, it is expected to achieve business coordination.

Risk hints: policy support in the prefabricated construction industry is lower than expected; competition in the industry intensifies; downstream demand for prefabricated construction is lower than expected; raw material costs grow higher than expected; China Rallway brings lower-than-expected business support to the company; loss or aggravation of impairment of assets such as bad debts.