Events:
The company released its semi-annual report for 2017. during the reporting period, the company achieved operating income of 217 million yuan, an increase of 25.28% over the same period last year, and the net profit belonging to shareholders of the parent company was 32.32 million yuan, an increase of 2.83% over the same period last year.
Comments:
The revenue growth mainly comes from the consolidated table, and the gross profit margin and expense rate have increased. In the first half of this year, the company's operating income was 217 million yuan, an increase of 25.28% over the same period last year. The growth mainly came from the consolidated company, and the revenue of the company increased by 7.63%. The gross profit margin of landscape and decoration design in this issue is relatively high, and the company's gross profit margin has increased by 44.68% compared with the same period last year, of which Q2 gross profit margin is as high as 50.81%, which is higher than that of the same period last year by 4.86pct. Due to the increase in equity incentive costs, the company's management expense rate increased significantly to 22.56% in the first half of the year from 18.40% in the same period last year, leading to an increase in the expense rate from 18.85% to 23.88%. The operating cash flow in the current period has deteriorated, from a net inflow of 5.95 million yuan last year to a net outflow of-41.51 million yuan, mainly due to a larger increase in the wages of the staff and workers paid in the current period.
With the continuous development of epitaxial mergers and acquisitions, a branch office was set up in Beijing to share the Xiongan feast. In the course of the development of the international design giant AECOM, at present, domestic design companies have set off a wave of mergers and acquisitions. Su Jiaoko has successfully expanded and strengthened the demonstration effect by this strategy, and the regional barriers of the design industry are still high, so that more and more design enterprises join the ranks of mergers and acquisitions. The company has acquired Suzhou Zhongzheng Engineering Inspection and 51% stake in Beijing-Shenzhen Billoude Company, extending the company's business from architectural design to interior, landscape design and testing, and gradually moving out of Jiangsu to a larger market with the help of acquisition targets. Billoude promised that the company's deduction of non-net profit from 2016 to 2018 would not be less than 2000, 2500, and 30 million yuan, of which 26.42 million yuan had been achieved in 2016, greatly exceeding the promised amount, taking into account the sufficient orders on hand and the strong certainty of realizing the performance commitment in the future. will directly thicken the company's performance. Recently, the company plans to buy 100% shares of Shenzhen Jiali with 650 million yuan, and the speed of epitaxial mergers and acquisitions continues to accelerate. During the reporting period, the company has set up a Beijing branch and successfully signed the architectural design contract of Zhongchuan Cultural Science and Technology Park, which indicates that the company has accelerated its full integration into the coordinated development of Beijing-Tianjin-Hebei integration and is expected to benefit from the construction of Xiongan New area.
Won the bid EPC project for the first time, and the business extension has achieved initial results. The company won the bid to enlighten the EPC general contracting project of the first phase of Science and Technology City, with a project amount of 255 million yuan. This is the first order won after the company proposed to promote the EPC general contracting business, which will provide more experience for the company's follow-up development and cooperation of similar projects, and help to promote the development of the company's engineering general contracting business. The winning bid means that the company has transformed and upgraded from a single architectural design business to a diversified whole industrial chain model covering the whole process of engineering construction industry chain, such as planning and consultation, regional planning, design general contract, project management, etc., indicating that the company's extension from design to EPC general contracting has achieved initial results.
Financial forecast and valuation: we forecast that the company's 2017-2019 net profit will be 0.88,1.03,123 million yuan respectively, EPS is 0.72,0.84,1.00 yuan, corresponding to PE is 36X, 31x, 26x, the first coverage, given a "buy" rating.
Risk hint: extension integration is not as expected and business development is not as expected.