Events:
The company released its annual report on April 22nd that its operating income was 806 million yuan, down 2.62% from the same period last year, and its net profit was 50 million yuan, down 24.59% from the same period last year. According to the first quarter report of 2021 released on the same day, the company achieved an operating income of 166 million yuan, an increase of 38.90% over the same period last year, and a net profit of 21 million yuan, an increase of 3.70% over the same period last year.
Comments:
The epidemic affected performance, and 2021Q1 began to pick up. Affected by the COVID-19 epidemic, the company's staff mobility is limited, the progress of the project is delayed, and the performance has declined in 2020. In 2021, thanks to the resumption of work and production, the impact of the epidemic gradually dissipated, the project construction was carried out normally, the company's performance picked up in the first quarter, and the full-year performance is expected to further improve.
There are plenty of orders on hand to support future performance. With the gradual improvement of the company's brand influence and core competitiveness, it has successfully undertaken and promoted a number of major projects by virtue of its comprehensive competitiveness. In 2020, the company won the bid for the EPC project of Jinshan Avenue Landscape Promotion Project in Nanchang Economic Development Zone, the EPC general contract of Chuanchang River Landscape Construction Project (county section) and the general contract of EPC project of Yancheng Wetland Park, etc. By the end of 2020, the company had orders on hand of more than 800 million yuan. In the first quarter of 2021, the company won the bid for the EPC general contract of the cultural and tourist node project in Linhu and the village entrance area of Shazhuang Ancient Village, Jianhu County, Jiangsu Province. With the follow-up of the project of the order in hand, the future performance of the company will be supported.
The issuance of additional shares demonstrates the confidence of the company. In order to support the comprehensive promotion of the company's strategy of two-wheel drive development of design business and ecological environment business, the company launched to issue shares to specific targets in 2020, raising funds of no more than 67 million yuan. At present, it has obtained the approval of the China Securities Regulatory Commission to register. The garden industry takes advantage of the "carbon peak, carbon neutralization" policy to improve the prosperity of the industry. in the situation of intensified competition, the improvement of the company's competitiveness will help to expand the market share.
Improved cash flow and improved profit quality. As the company further strengthened the management of accounts receivable, the payback situation was significantly higher than that of the previous year. The net cash flow generated by operating activities in 2020 was 52 million yuan, an increase of 110.81% over the same period last year. The improvement of the company's cash flow not only reduces the operating risk, but also improves the profit quality.
Give the company a "buy" rating. Combined with the company's quarterly report, the company adjusts its profit forecast for 2021, and the company's EPS from 2021 to 2023 is expected to be 0.62, 0.87, and 1.00 yuan.
Risk Tip: the risk that newly signed orders fall short of expectations and performance forecasts and valuation judgments fall short of expectations.