There are plenty of orders on hand, and the fundamentals have further improved. In the first three quarters of 2020, the company achieved operating income of 366 million yuan, down 13.82% from the same period last year, and the net profit attributed to the parent company was 35.4665 million yuan, down 15.83% from the same period last year. The company was gradually weakened by the epidemic. Compared with the 22.24% year-on-year decline in revenue in the first half of 2020, operating income gradually recovered in the third quarter. 2020Q3 achieved operating income of 179 million yuan, an increase of 4.04% over the same period last year. In the second half of 2020, the company won the bid for Chuanchang River Landscape Construction Project (county section) EPC general contract and Yancheng Wetland Park EPC project general contract project, the total amount of the two projects is 226 million yuan, accounting for 27.35% of the company's total revenue in 2019, providing good support for the company's next performance development.
Enhance the financial strength to grasp the opportunities for the development of the industry, optimize the capital structure to help the development of the company. The company plans to issue shares to specific targets at an issue price of 15.25 yuan per share, with no more than 4393440 shares issued. This issuing company can better grasp the industry opportunities, focus on the development of ecological restoration and environmental governance, and provide strong financial support for the company's business development to enhance the company's value. This issue can also increase the company's owner's equity, reduce the company's asset-liability ratio, optimize the capital structure, and reduce the company's financial risk.
"carbon neutralization" tuyere is good for the development of garden industry. "achieving carbon peak by 2030 and carbon neutralization by 2060" is the focus of China's next environmental work, and the proposal of the 14th five-year Plan also emphasizes that "the ecological environment will fundamentally improve by 2035." the goal of building a beautiful China has been basically achieved. Under the favorable policy background, the demand for landscaping and ecological governance will continue to be active, and the medium-and long-term growth space of the industry will be broader. With the economic recovery, infrastructure growth and policy support, the ecological and environmental protection industry under the background of the new development stage will also usher in huge development opportunities.
Good reputation and operation model highlight the company's development advantages. The design task of the "G20 Hangzhou Summit" core project previously undertaken by the company, such as the roof garden design of Hangzhou International Expo Center, has accumulated a good brand image and enjoys a certain degree of popularity in China. As a professional landscape design service provider with integrated solution as the core, its whole industry chain service model from scheme design to construction cooperation will have more significant advantages in EPC project contracting.
Give the company a "buy" rating. Combined with the company's performance in the first three quarters, the company lowered its profit forecast for 2020. The profit forecast for the next two years will remain unchanged, and the company's EPS in 2020-2022 is expected to be 0.490.75Unix 0.87 yuan.
Risk hint: the landing of the contract is not as expected, and the profit forecast and valuation are not as expected.