The company's 2016 homing net profit was revised from loss to profit
On January 24, 2017, the company revised its expected results from previous losses to profits, which was in line with our profit judgment, but the growth rate was lower than previously expected. 1) before the revision, according to the company's "three Quarterly report 2016" and "2016 Annual results Forecast", the company's 2016 return net profit was 4321-33.21 million yuan; 2) after the revision, the company's 2016 return net profit was 6-12 million yuan, compared with a profit of 7.01 million yuan in the same period last year. The lower-than-expected performance was due to the lower-than-expected progress of the fixed increase and the lower-than-expected interest income from the previously considered part.
Business revenue is better than expected, so it is profitable in the end.
The main reasons for the revision of the company's performance are as follows: 1) benefiting from the requirements of the Ministry of Housing and Construction and local governments on the progress of the sponge city construction project, the progress of the company's Qian'an and Suining sponge city construction PPP project and other sponge city related planning, consulting and technical service income are better than expected; 2) the volume of environmental protection projects such as water affairs in the fourth quarter is better than expected. 3) most of the environmental protection engineering business is checked and settled in the fourth quarter, which makes the company's earnings in the fourth quarter better than expected.
The direction of Sponge City has proved the feasibility of cutting from planning business to construction business.
The company acquires and increases its stake in Qingkuan Human settlement Research Institute. after holding 70%, it leads the country in sponge city planning; and acquires and increases capital in the Central Century to strengthen engineering construction capacity; with the successive winning bids for the sponge city construction PPP project in Qian'an, Suining and Yuxi, it proves the feasibility of the company's development idea of bullying the construction business by planning business, which is conducive to the expansion of the company. In sponge urban planning, the Institute of cleaning and Control and Human Settlements has cooperated with several pilot cities and a number of non-pilot cities, contributing good potential project resources for the company. With the advance of sponge city construction, the company is expected to continue to obtain orders for sponge city construction projects, such as Pingxiang, Fuzhou and so on.
Revise the non-public offering plan for the third time to promote the progress of issuance
Recently, the company revised the non-public offering plan for the third time, reducing the amount of funds raised by the "Intelligent drainage system Construction Project" from 1.04 billion yuan to 662 million yuan, so the total amount of funds raised did not exceed 4.688 billion yuan to 4.311 billion yuan. Reduce the impact of performance dilution. Among them, 3.15 billion yuan has been invested in the sponge city PPP construction project, which will greatly benefit the development of the company's core business, Sponge City. This revision also changes the orientation of Sponge City from Qian'an, Pingxiang and Suining to three bid-winning projects of Qian'an, Suining and Yuxi, and the feasibility of issuing the preliminary plan has been greatly improved. Set up the Liangwan Fund to lay the foundation for the company to expand its business in the future. The Liangwan Fund is used for the industrialization of relevant scientific and technological achievements of Tsinghua Berkeley Shenzhen College. The proportion of the company's contribution is 19%, which is conducive to the company's investment income. And lay the foundation for the company to expand business channels in the future.
It is optimistic that the company will maintain its leading position in the direction of Sponge City and maintain its "buy" rating.
With the development of Sponge City, we are optimistic that the company will continue to obtain projects; as the progress of the fixed increase is lower than expected, the interest income and the progress of some projects are lower than expected, so we downgrade the profit forecast, and it is estimated that the EPS for 2016-2018 will be 0.01140.12100.26 yuan respectively; on the basis of the 2018 profit forecast, we will give it 40-41 times valuation, corresponding to the target price of 10.40-10.66 yuan per share, and maintain the "buy" rating.
Risk Tip: the payback speed of Sponge City business is not up to expectations.