Events:
The company released its quarterly report for 2021 on April 27th. During the reporting period, the company achieved an operating income of 524 million yuan, an increase of 26.76% over the same period last year, and a net profit of 100 million yuan, an increase of 26.05% over the same period last year.
Comments:
Out of the impact of the epidemic, Q1 performance grew steadily. In Q1 in 2021, the company's revenue and net profit increased by more than 25%. The main reason is that the company continues to focus on ecological restoration business, optimize business structure, actively open up the market, and good project completion.
The implementation of the equity incentive scheme demonstrates the company's confidence in the development of the company. In April 2021, the company examined and approved the first phase of the employee Stock ownership Plan (draft) in 2021, with a total of 1.6244 million shares. The lock-up period is 12 months. After the lock-up period expires, it will be unlocked in three phases according to the company's performance targets and personal performance evaluation results of the previous year, and the unlocking rates of each period are 50%, 30% and 20%, respectively. Among them, the performance target of the company is based on the net profit of homing in 2020, and the growth rate of net profit in 2021-2023 is not less than 22%, 38%, 58.7%. The plan will help the company to establish and improve the benefit-sharing mechanism, improve the incentive and restraint mechanism, improve the cohesion of employees and the competitiveness of the company, but also demonstrate the company's confidence in future development.
Pay attention to risk control and improve cash flow. The company actively improves the enterprise risk control mechanism, takes a variety of measures to increase the recovery of project funds, and enhance the cash flow capacity. The net cash flow of the company's operating activities in 2020 has changed from-78 million yuan in 2019 to 23 million yuan. The pressure on cash flow has eased somewhat. The net cash flow from 2021Q1's operating activities was-137 million yuan, which was lower than that of-145 million yuan in the same period last year. The company pays attention to the cash flow situation to protect the steady and healthy growth of performance.
There are plenty of newly signed contracts to ensure future performance. In the first quarter of 2021, the company and its subsidiaries won two new bids, totaling 174 million yuan, and four newly signed project contracts, totaling 477 million yuan, an increase of 72.4 percent over the same period last year. Among the newly signed project contracts, there are 4 business contracts for the construction of landscaping ecological projects. Sufficient project contracts lay the foundation for the company's future performance.
Give the company a "buy" rating. Combined with the company's 2020 annual report, considering that the growth rate of the company's return net profit is lower than expected, and the asset impairment loss is large, so the profit forecast and target price are reduced. It is estimated that the EPS of the company from 2021 to 2023 will be 1.44 Placement 1.72 Plus 2.04 Yuan respectively.
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.
