Event: the company disclosed its performance forecast for the first half of 2019 and expected to achieve a net profit of 61.05 million yuan to 72.15 million yuan, an increase of 10% over the same period last year.
The company's business is advancing smoothly, the performance continues to grow, and the business structure continues to be optimized!
During the reporting period, the company further accelerated the pace of strategic transformation of agricultural services and agricultural science and technology, and the main business was progressing smoothly, especially in smart water and farm services. During the reporting period, the business income scale of the company showed a growth trend, and the gross profit is expected to be 200 million-230 million yuan. In the first half of the year, the company has successively obtained high-quality orders in Yunnan, Inner Mongolia, Xinjiang, Ningxia, Gansu and other places, with sufficient orders on hand, effective construction of local projects, and initial results in farmland operation and service business. the composition of business income has been further optimized.
With the promotion of rural revitalization strategy and the transformation of PPP mode, the company's orders and performance are expected to grow high!
Since 2016, there have been two major changes in the industry: first, the state has put forward higher requirements for the construction, management and transportation of farmland water-saving projects; second, the introduction of PPP model in the field of farmland water-saving construction, which has a large number of PPP orders and higher requirements for the financing capacity of enterprises. Industry changes are more conducive to the leading enterprises with large brand influence, sufficient construction experience, strong financing capacity and high level of operation and maintenance management, and the industry concentration will be accelerated. 2) the company has a high growth in order revenue. As the industry leader, the company's newly signed orders reached nearly 3 billion and 4.5 billion respectively from 2017 to 2018, a year-on-year growth rate of 88 per cent and 52 per cent respectively. Even under the influence of the tightening of national financial policy and the adjustment of the Ministry of Agriculture and villages in 2019, the company still achieved 39% revenue growth. It is expected that with the improvement of the country's financial environment and the completion of the adjustment of the Ministry of Agriculture and villages, the landing rate of company orders will accelerate, and the company's performance is expected to accelerate in 2018-2021.
The "Yuanmou model" is profitable, which opens a new chapter in the upgrading of the company's business model.
"Yuanmou model" means that the company realizes the operation of irrigation and water conservancy facilities on the basis of farmland water-saving projects, and provides farmers with extended water and fertilizer integration, planting technology and other value-added services. Yuanmou model will realize the transformation and upgrading of the company's business model from engineering contractor to "farmland housekeeper". According to estimates, under the "Yuanmou model", the company's average profit space per mu can reach 600 yuan / mu. As of 2018, Yuanmou project has an operating area of 76000 mu, and is expected to achieve full operation of 90,000 mu in 2019.
It is expected that the "Yuanmou model" will be promoted rapidly, and the company's farmland operating area is expected to grow rapidly! As a forerunner, the company is expected to rely on the dominant position of its listed companies and the experience of Yuanmou model, fast horse racing enclosure, to find and occupy superior agricultural resource areas throughout the country, and to achieve the rapid expansion of its farmland operating area. At present, the company has Yunnan Xiangyun, Binchuan and Gansu Wushan three projects with a total area of 150000 mu is in the construction period. It is estimated that the operating area of cash crops in 2019-2021 is expected to reach 150000 mu, 300000 mu and 600000 mu.
Give a "buy" rating:
It is estimated that from 2019 to 2021, the company's income will be 26.25 million, an increase of 47.51%, 31.14%, and a net profit of 2.20 million, 330, 490 million, 119.28%, 50.25%, 48.35%, 0.28, 0.41 and 0.61 yuan, respectively, and the PE corresponding to the closing price of 5.86 on May 12 is 21, 14 and 10 times. Taking into account the company's broad space for development and the rapid growth of performance, continue to give "buy" rating!
Risk tips: 1, the change of national policy; 2, the landing of the order is not as expected; 3, business transformation is not as expected.