China Construction Group (603018): Repurchase boosts profitability
Performance growth was in line with expectations, and revenue growth slightly replaced the company’s 19H1 to achieve operating income19.
15 ppm, an increase of 12 in ten years.
5%; net profit attributable to mother 2.
07 million yuan, an increase of 23 in ten years.
2%; deduct non-net profit 1.
800 million, an increase of 15 every year.
By business, survey and design business income17.
1 ppm, an increase of 23 over the same period last year.
5%, EPC business income 2.
1 ‰, a year reduction of 35.
Group New Millennium Single 40.
0 million yuan, an increase of 18 in ten years.
8%, of which 33 were new undertakings in survey and design.
20,000 yuan, an increase of 13 in ten years.
Among them, the company’s orders and revenue growth in the first half of the year are expected to be mainly affected by the 18-year high base and the reduction of large-scale survey and design projects in Jiangsu in the first half of 19th.
According to the company’s annual report, the company plans to increase its annual growth rate by 15% -35%, revenue by 20% -40%, and its net profit attributable to mothers by 15% -35%. The overall growth trend will continue.
EPC business contraction resulted in higher profit levels. In the second half of the year, cash flow improved and the company’s gross profit / net margin in 19H1 was 30.
7% / 11.
1%, the earlier 18H1 increased by 0.
1pc, profitability has improved, it is expected that the company ‘s low gross profit margin EPC business conversion ratio, and the EPC business gross profit margin will also increase 成都桑拿网 accordingly.
In terms of cash flow, the company’s net operating cash flow in 19H1 was -4.
600 million, with a net increase of 1.
US $ 700 million, which we expect is mainly due to the company’s early bonus results and high bonus issuance.
At present, the company has slowed down the acceptance of EPC projects, expanded the financing environment and improved the company’s carry-over in the second half of the year. The company’s cash flow is expected to turn positive.
New regulations for special bonds are good for the front-end design industry of infrastructure, and the increase in orders in the province is good for the provincial design leader. In June, the government issued new rules for special bonds, which clarified that special bonds can be used for some major project capital, which is conducive to local governments to reduce project capital fundingproportion.
The new 杭州桑拿 regulations will effectively increase the growth rate of infrastructure investment, and the development of infrastructure, the design advances, and the adjustment of counter-cyclical adjustment will increase. The company as a leader in the design industry is expected to continue to benefit.
In addition, the Jiangsu Provincial Government issued the “Opinions of the Jiangsu Provincial People’s Government on Accelerating the Construction of the Modern Integrated Transportation System in the Province” to accelerate the construction of transportation infrastructure in the province, while the company’s orders and revenue ratios within and outside the province generally remain around 6: 4We expect that the order situation in Jiangsu Province in the second half of the year will be improved compared with the first half, and the company, as a leading design company in Jiangsu Province, is expected to accept more orders.
Profit forecasting and investment rating companies have obvious advantages in terms of technical strength and cash flow management. At the same time, as the leader of infrastructure front-end design companies, they continue to benefit from the “infrastructure supplementary policy” and the integration of the Yangtze River Delta.Both maintained relatively rapid growth.
In addition, the company implemented the first phase of employee stock ownership plan, with a scale of no more than 31 million yuan, which stimulated the vitality of employees.
Recently, the company announced that it plans to repurchase 30 to 60 million yuan for employee stock holdings, not exceeding 14 yuan / share.
It is expected that the company will realize net profit attributable to mothers in 19-21.
3.7 billion.The company’s existing PE (TTM) 12.
7 times, while the average PE (TTM) of other A-share design companies is about 24 times. The company ‘s current forecast level is expected, and we predict that the company’s compound annual growth rate in the next three years will be more than 20%.The company’s EPS in 19 is expected to be 1.
067 yuan / share, the corresponding company’s reasonable value is about 16.
00 yuan / share, maintain “Buy” rating.
Risk reminder: Project investment is less than expected, the order conversion speed drops faster than expected, the growth rate of new breakthrough orders penetrates faster than expected, the bad debt rate of accounts receivable increases, and the risk of rising labor costs.