Events:
The company issued the annual report for 2020 and the first quarter report for 2021 on April 26th. In 2020, the company achieved an operating income of 2.542 billion yuan, a decrease of 10.87% over the same period last year, and a net profit of 232 million yuan, an increase of 280.77% over the same period last year. In 2021, Q1, the company achieved operating income of 245 million yuan, an increase of 31.17% over the same period last year, and a net profit of 11 million yuan, an increase of 163.17% over the same period last year.
Comments:
The number of newly signed orders increased, laying the foundation for performance. In the first quarter, the company signed 10 newly signed engineering construction contracts (including bid winning notices and framework agreements), totaling 2.422 billion yuan, about 27 times that of the same period last year; 4 newly signed seedling sales contracts, totaling 642600 yuan; and 1 newly signed technical service contract, totaling 100000 yuan. Sufficient orders laid the foundation for the company's future performance.
Attach importance to technological innovation, and investment in research and development has greatly increased. In 2020, the company spent 123 million yuan on research and development, an increase of 124.16% over the same period last year, mainly because the company increased the application of plant diversity and ecological restoration technology research on desertified grasslands, mines, saline-alkali land, and so on. In 2020, the company carried out 17 scientific research projects and projects on ecological protection and restoration, completed 141 patent applications, increased the number of scientific research platforms to 22, and its walking lawn won the highest award of the 24th National Invention Exhibition. The company continues to invest in research and development, which is conducive to consolidate its own technological strength and achieve sustainable development.
The PPP project is on the right track and the company's management capacity has been enhanced. In 2020, the company's financial expenses totaled 172 million yuan, a decrease of 35.89% compared with the same period last year. The main reason is that the company's PPP project has entered the operation period without an increase in financing income. At the same time, the company's management and sales expenses decreased by 15.07% and 12.89% compared with the same period last year, mainly due to the adjustment and optimization of the company's marketing, procurement, human resources and other aspects, and the continuous improvement of the company's operation and management ability.
Mainly engaged in natural ecosystem protection and management, gross profit margin has been improved. From the perspective of business split, the protection and management of natural ecosystem accounts for the largest proportion, accounting for 97.94% of revenue. The gross profit margin of this business in 2020 was 34.77%, an increase of 5.31%. With the continuous promotion of the "carbon neutralization" policy, the company's main business will be further developed, and the performance is expected to enter a new round of growth cycle.
Give the company a "buy" rating. It is estimated that the EPS of the company from 2021 to 2023 is 0.18, 0.27, 0.36 respectively. Taking into account that the company benefits from the national policy, and the development is improving, and the value is undervalued, the target price is raised to 5.40 yuan. (note: the dividend of preferred stock is deducted when calculating EPS) risk hint: the risk that the payback of the order is lower than expected, and the performance forecast and valuation judgment fall short of the expected risk.