Incidents:
The company released its 2022 mid-year report, which achieved revenue of 1,112 million yuan in the first half of the year, a decrease of 5.03% over the previous year; achieved net profit of 0.3 billion yuan, a decrease of 62.8 percent over the previous year; and achieved net profit of 26 million yuan after deducting non-return mother's net profit of 26 million yuan, a decrease of 1.72% over the previous year.
Comment:
The real estate industry is sluggish and investment returns have declined, and performance has declined. The company's 202H1 revenue decreased 5.03% year on year, mainly due to the domestic macroeconomic downturn and deep adjustments in the real estate industry; performance decreased 62.86% year on year, the decline was greater than revenue, mainly due to 2022H1's confirmed investment income of 1,090,900 yuan, a decrease of 46.912,200 yuan over the same period last year.
Gross margin remained steady, and cost ratios increased somewhat. The company's gross margin remained steady in 2022H1, increasing 0.28pct to 11.63% year on year. The company's expense rate increased 0.86pct to 8.4% during the 202H1 period, of which the sales expense ratio increased 0.04pct to 1.19%; the management expense ratio increased 0.37pct to 3.55%; the R&D expense ratio increased 0.56 pct to 3.67%; and the financial expense ratio decreased 0.11pct to 0%.
Architectural design is in reserve, and the expansion of special fields of expertise has shown results. In terms of architectural design, although the national real estate market is sluggish, the company has prepared new projects in the business fields of urban renewal, demolition and resettlement housing, commercial real estate, landscape planning, industrial parks, urban complexes, cultural and sports education, rural construction, etc., with a new contract amount of 115 million yuan. In terms of gas thermal engineering, 2022H1 achieved design revenue of 53.85 million yuan, and signed a new contract amount of about 74.99 million yuan, an increase of 47.04% over the previous year. It also has the characteristics of high single project amounts, large number of consulting projects, large market breakthroughs in key regions, and good business development in markets outside the province. Currently, it has covered 16 provinces. In terms of environmental sanitation engineering, we are actively developing key projects in the environmental sector, mainly focusing on water treatment, sanitation, pipe network projects, etc. Some key projects have the characteristics of large project investment and high professional design costs.
Soft power is gradually improving, and overall competitiveness is increasing. 2022H1 participated in the preparation of a total of 20 industry standards, including the preparation of 4 national industry standards, 2 of the China Engineering Construction Standardization Association, and the editor-in-chief of 14 provincial and municipal industry standards. Among them, the “Technical Guidelines for Inspection and Renewal of Urban Gas Pipelines” and “Technical Guidelines for Urban Road, Road and Bridge Transition Sections (Trial)”, etc. which participated in the editor-in-chief have been published, further enhancing the company's influence within the industry.
Due to the impact of the epidemic and the real estate industry, the downgrade rating was “increase in holdings”. The 2022-2024 EPS was lowered to 0.32/0.35/0.39 yuan.
Risk warning: The company's performance is not as good as expected, accounts receivable repayment risk, macroeconomic risk.