Conclusions and suggestions:
The company recently announced that Jiangsu Ba'an Construction Company, a wholly owned subsidiary, has won the bid for the PPP project of urban road network construction and upgrading in Qinyang City, with a total investment of 1.16 billion yuan, operating in BOT mode, with a cooperation period of 18 years, including 3-year construction period and 15-year operation period. Recently, the company has won a series of large-scale PPP projects, including the PPP project with a total amount of 1.28 billion yuan for the comprehensive transformation of the first ring water system in Cao County, Shandong Province, the 490 million water supply project in Heilongjiang, and the 330 million PPP project in Kunming, etc., showing the company's extremely strong ability to take orders, with rich orders, the company's future performance is expected to maintain high growth.
It is estimated that the company's 17-19 net profit will be 2.39,3.42,464 million yuan, and the YOY+69.31%, 43.51% and 35.52 PE26X EPS will be 0.36,0.51,0.69 yuan respectively. The current stock price corresponds to the 17-19 dynamic EPS, 18x, 13x, the company's business expansion is sustainable, and the certainty of high-speed growth in the future is high, so give "buy" suggestions.
Pre-won the bid for the PPP project for the construction and upgrading of the urban road network in Qinyang, Henan Province: the total investment of the project is 1.16 billion yuan, including the construction of roads and supporting facilities, the upgrading and renovation of intelligent transportation of the urban road network, the construction of public service advertisements for urban LED electronic display screens, and the construction of urban sanitation infrastructure.
The cooperation period of the whole project is 18 years, including 3 years of construction and 15 years of operation. The project is the feasibility gap subsidy model, that is, the government pays subsidies for project availability payment (construction + financing + reasonable return) + maintenance cost (operation + reasonable return)-user payment amount. The winning bid fully shows that the merger and acquisition of Nantong Huafu Construction Engineering Company has achieved certain results, laying a solid foundation for the follow-up development of municipal business.
Won the bid for the PPP project of comprehensive reconstruction of the first ring water system in Cao County, Shandong Province: the company announced on December 27 that the lead party and Jiangsu Shenlong Ocean Engineering Company jointly won the bid for the Cao County PPP project with a total amount of 1.28 billion yuan, covering a total area of 2145 mu. Among them, 1535 mu of park (including water surface), 269mu of school land and 341mu of road land. The total construction area of the project is 204200 square meters, including 179200 square meters of schools and 25000 square meters of park buildings. The project is also a feasible gap mechanism and adopts the BOT model, with an operating period of 15 years, divided into 2 years of construction and 13 years of operation. Winning two large PPP projects in succession shows that the company has a strong ability to take orders in the PPP market, and lays a solid foundation for the further development of Henan and Shandong local markets.
The stock ownership incentive plus employee stock ownership plan shows confidence in future development: as of September 17, the first phase of the employee stock ownership plan has purchased 12.81 million shares, at a cost of 134 million yuan, with an average price of 10.43 yuan per share. The purchase limit of the whole stock ownership plan is 300 million yuan. At present, there is still room for purchase of 140 million yuan, and it is expected to continue to increase its holdings in the later stage. In addition, the company launched an equity incentive program in 2016. high performance conditions are set: the growth rate of deducted non-net profit in 2016-2019 is not less than 85% (about 142 million), 190% (about 223 million), 308% (about 314 million) and 420% (about 400 million). At the same time, the weighted average return on assets is not less than 9%, 10%, 11% and 12%. High-standard incentive conditions are conducive to the unity of the company and promote the rapid development of performance.
The company is in an industry with high growth in the next 1-2 years: the company's business focuses on desalination and sponge cities.
By the end of the 15th, the scale of seawater desalination in China has reached 1.33 million tons / day, which is only 1.2% of the world scale of 85.24 million tons / day. At present, seawater desalination in China is used in industry, concentrated in coastal provinces with higher water prices, and it is expected that the 13th five-year Plan will usher in the critical point of outbreak. The first two pilot cities of Sponge City are progressing smoothly, and the third batch of cities will be launched soon. According to the Ministry of Housing and Construction, more than 20% of the urban built-up area will meet the target requirements by 2020, and by 2030, more than 80% of the urban built-up area will meet the target requirements, and the entire market size will exceed trillion yuan. With leading technology and project experience, the company is expected to fully enjoy the benefits of the outbreak of the industry and achieve rapid development.
Profit forecast: the company's 17-19 net profit is expected to be 2.39,3.42,464 million yuan, and the YOY+69.31%, 43.51% and 35.52 PE26X are 0.36,0.51 and 35.52 yuan respectively. The current stock price corresponds to the 17-19 dynamic PE26X, 18x and 13x, the company's business expansion is sustainable, and the certainty of future rapid growth is high, so "buy" suggestions are given.