Event: the company publishes its 2021 semi-annual report. In the first half of 2021, the company achieved revenue of 4.492 billion yuan, an increase of 19.19% over the same period last year, and a net profit of 215 million yuan, an increase of 19.15% over the same period last year, deducting 177 million yuan of non-net profit, an increase of 17.45%.
The performance grew steadily and the net cash flow of operation improved. 2021H1 achieved revenue of 4.492 billion yuan, an increase of 19.19% over the same period last year, mainly because the workload of projects under construction was more than that of the same period last year. Of this total, revenue from construction projects reached 4.401 billion yuan, an increase of 18.96 percent over the same period last year; revenue from asphalt concrete and related products reached 70 million yuan, an increase of 12.41 percent over the same period last year; and revenue from environmental protection business reached 2 million yuan, a decrease of 25.45 percent over the same period last year. 2021H1's gross profit margin and net profit margin were 7.1% and 4.83% respectively, year-on-year changes-1pct and-0.03pct, net operating cash flow of-1.152 billion yuan, 464 million yuan less than-1.616 billion yuan in the same period last year, mainly due to an increase of 768 million yuan in cash received in the current period of selling goods and providing services. Cash received from other business activities decreased by 339 million yuan, cash payments for purchase of goods and services decreased by 409 million yuan, and other cash payments related to business activities increased by 344 million yuan. As of June 30, 2021, the company's asset-liability ratio was 61.21%, an increase in 4.55pct compared with the same period last year.
The newly signed order set the best level in the same period. The amount of newly signed projects by 2021H1 Company exceeded 8 billion yuan, the best level in the same period. In the first half of the year, the company continues to increase market development efforts, continue to grab market orders. In terms of basic engineering projects, the new projects mainly include Shanghai South Highway (Zha Hang Highway-G1503 Highway) reconstruction project, Yang Gaonan Road (Longyang Road Interchange-Gaoxi Road) reconstruction project, etc.; in terms of housing construction projects, the new projects mainly include the collection and resettlement housing project of plot 07-01 in the southeast community of Huinan Town, Pudong New area, and the collection and resettlement housing project of A01 neighborhood (A01-02b) of Huaxia community unit in Sichuan sand.
Actively expand new business and transform municipal infrastructure "investment builders". The company's traditional business is the construction business, due to the low profit margin of this business, in order to improve the profitability, the company vigorously develop infrastructure project investment business, actively implement the project investment business to promote the traditional construction business business strategy. At present, the infrastructure investment projects operated by the company are mainly concentrated in economically developed areas such as the Yangtze River Delta, and the local governments at all levels of cooperation have relatively strong financial strength, which ensures the continued stability of the income sources of the company's investment projects. At the same time, the company has extended to the development and operation of commercial office real estate and industrial parks. In the development and operation of the park, the company strives to improve the level of project development through the advantages of the main business of construction and business resources, create industrial ecology in the industrial park, do a good job of industrial services, and through participation in investment in scientific and technological innovation funds, open up the "fund + base" industrial park operation mode, and obtain the double benefits of operation services and industrial investment.
Investment suggestion
It is estimated that from 2021 to 2022, the EPS of the company will be 0.51 plus 0.62 yuan per share, and the corresponding dynamic price-to-earnings ratio will be 10.06, respectively, maintaining the "recommended" rating.
Risk tips: the risk that the newly signed order will fall short of expectations; the risk of increasing competition in the industry; and the risk that the recovery of accounts receivable is not as expected.
