Events:
The company released its report for the third quarter of 2020 on October 28th, with operating income of 1.356 billion yuan in the first three quarters, an increase of 94.32% over the same period last year, net profit attributable to the parent company of 58.77 million yuan, up 24.76%, and basic earnings per share of 0.26 yuan, up 18.18% over the same period last year.
Comments:
Revenue has reached a new high and investment in research and development has increased. In the third quarter alone, the company achieved revenue of 51.49 million yuan, an increase of 95.59% over the same period last year, a net profit of 17.45 million yuan belonging to the parent company, an increase of 73.64% over the same period last year, and an investment of 43.2 million yuan in R & D, an increase of 55.17% over the same period last year. The company's R & D investment is mainly related to green energy saving, BIM technology application, prefabricated housing, intelligent buildings, ecological environment governance and other fields, which lays a good foundation for the company's information construction and helps to improve the company's core competitiveness.
The prefabricated construction policy is favorable, and the industrial development is accelerated. The 13th five-year Plan of Action for prefabricated buildings issued by the Ministry of Housing and Construction in March 2017 clearly states that by 2020, prefabricated buildings will account for more than 15% of new buildings in China, including 100% in Shanghai and 30% in Hangzhou.
In July 2020, 13 departments including the Ministry of Housing and Construction jointly issued the guidance on promoting the coordinated Development of Intelligent Construction and Building industrialization, further pointing out that it is necessary to speed up the upgrading of industrialization and vigorously develop prefabricated buildings. The company is located in Hangzhou and can effectively cover the business scope of key areas in Jiangsu, Zhejiang and Shanghai. under the promotion of favorable policies, combined with its own excellent prefabricated architectural design capabilities, the company will usher in a large number of high-quality orders. to lay a good foundation for the sustainable development of the company's performance.
After winning the bid for large projects, EPC business ushered in an explosive period. The company announced on October 19 and 21, 2020, and won the bid for 485 million yuan and 151 million yuan EPC general contracting project respectively. Successive large-scale bidding projects reflect the company's competitiveness and service level in the field of EPC. As the company continues to expand the market space, prefabricated architectural design and EPC general contracting projects will work together to drive the development of the company.
Maintain the company's "buy" rating. It is estimated that the growth rate of net profit belonging to the parent company from 2020 to 2022 will be 34%, 24% and 21%, respectively, and the EPS for 2020-2022 will be 0.55 yuan / 0.68 yuan / 0.83 yuan respectively.
Risk hint: the development of prefabricated buildings is not as expected and the systemic risk.