Content summary:
Event: the company issued a performance forecast for the first half of 2019, with an estimated return net profit of 0-40 million yuan, a decrease of 89.61-100% over the same period last year, and a total non-recurrent profit and loss of about 17.54 million yuan, which was lower than expected. The main reason is: the company takes the initiative to adjust the pace of project promotion, revenue has declined compared with the same period last year, while due to rising financing costs and increased financial expenses, the net profit of homing has declined compared with the same period last year.
In the first half of 2019, the company announced successively many projects, such as the "warm town" PPP project of Qiaoxu, Gangnan District, Guigang City (787 million), the second phase of Zhuxi landscape project EPC construction general contract (380 million), the first phase of Ma Yuanxi comprehensive renovation project EPC construction general contract (158 million), and so on. Orders are still sufficient. At the same time, ecological and environmental protection projects account for more than half of the newly signed orders. The company continues to upgrade its layout from landscape engineering to ecological and environmental protection industry, and its business structure is constantly optimized.
At the end of 2019, the company introduced Shenzhen State assets Strategic shareholder Shenzhen Investment Holdings Co., Ltd., promising that the net profit from 2018 to 2021 would not be less than 6.5max 10.8 / 1.19 billion yuan, with a growth rate of 115x66 won 10%. If the target is not met, it will provide cash compensation to Shenzhen Investment Holdings. In the future, it is expected to take advantage of its funds and other platform advantages to control financing costs, strengthen project settlement and payback, enhance project management and control capabilities, and be optimistic about its follow-up development.
In April 2019, the company announced that it plans to issue 1.87 billion yuan of preferred shares, of which 1 billion yuan will be used to repay bank loans and other interest-bearing liabilities, and the rest will be used to supplement working capital. The issue of preferred shares will effectively alleviate the financial pressure of the company and help the normal operation of the order on hand.
Profit forecast and investment advice. It is estimated that the return net profit of the company from 2019 to 2021 is 6.62,9.51 and 1.126 billion yuan respectively, and the EPS is 0.28,0.41,0.48 yuan respectively. Based on the closing price of 3.34 yuan on July 22nd, the corresponding PE is 11.83,8.24,6.96 times respectively, giving the company a "recommended" investment rating.
Risk hint. Policy promotion is not up to expectations, financial costs are rising, corporate performance is not up to expectations, market competition is vicious, and systemic risks in domestic and foreign secondary markets.
