China State Construction Group (603018): Multi-project increase in advance payment and advancement of project management capabilities to improve profitability
Investment Highlights: The company’s net profit growth in the first half of 201923.
2%, basically in line with our expectations (26%).
In the first half of 2019, the company achieved operating income19.
10,000 yuan, an increase of 12 in ten years.
5%, to achieve net profit attributable to shareholders of listed companies.
07 million yuan, an increase of 23 in ten years.
2%, of which 2Q19 company achieved revenue of 11.
30,000 yuan, an increase of 0 in ten years.
86%, achieving net profit1.
30 ppm, an increase of 20 in ten years.
In terms of business, the survey and design business realized operating income17.
10,000 yuan, an increase of 23 in ten years.
5%, revenue share increased by 12.
3 up to 89.
2%; other businesses (including EPC, construction, etc.) achieve operating income2.
07 million yuan, an average of 47 for ten years.
In the first half of the year, Jiangsu Huatong, an important holding company of the company, realized operating income1.
2 ‰ (+ 286%) and realized a net profit of 9.2 million yuan (+96.
6%); Jiangsu Weixin achieved operating income1.
470,000 yuan (ten years +18.
5%) and realized a net profit of 2.9 million yuan (-75.
6%); Ningxia Highway Academy realized operating income of 74.16 million yuan (ten years +20.
0%) and realized a net profit of 5.17 million yuan (-45.
9%); Yangzhou Design Institute realized operating income of 60.44 million yuan (+3 per year).
2%), and realized a net profit of 10.75 million yuan (ten years -3.
Increasing the proportion of survey and design revenues in supplementary engineering business management capabilities has improved and reduced nominal interest rates by zero.
In 12 units, government subsidies increased, and the net interest rate increased by 1 under the combined influence.
The company’s comprehensive gross profit margin for the first half of 2019 was 30.
7%, increase by 0 every year.
12 levels, of which the optimization of engineering contracting business management capabilities drives the gross profit margin from 0.
82% increased to 4.
76%, the gross profit margin of design business decreased by 5.
During the period, the expense ratio (including research and development) was basically the same as last year, with a slight increase of 0.06 singles to 15.
5%, of which the sales expense ratio decreased by 0.
49 good to four.
04%; management expense ratio decreased by 0.
19 up to 6.
72%; the company expanded its development in BIM technology applications, key technologies for trunk roads and railways, and comprehensive transportation, thereby increasing the percentage of R & D expenses to revenue by 0.
87 up to 4.
46%; financial expense ratio decreased by 0.
13 up to 0.
23%, mainly due to 杭州夜网论坛 a decrease in reported short-term short-term borrowings1 compared to the mid-18’s.
1.7 billion, monetary funds increased by 1.
Caused by 5.4 billion; the company’s assets and credit impairment losses as a percentage of operating income have been reduced by several times.
11 up to 3.
77%. The R & D center of the intelligent transportation technology and equipment transportation industry ranked first in the industry R & D center of the Ministry of Transport and realized 11.32 million yuan in government subsidy income. The company’s net interest rate increased under the comprehensive influence.
04 single to 11.
The substantial increase in advance payments indicates that a large number of projects are in progress, and the net operating cash flow in the first half of the year has repeatedly appeared.
1H19 net cash flow from operating activities was -4.
6 billion, more than once a year1.
67 ppm, of which cash was paid to and for employees7.
19 ‰, increasing by 2 every year.
In the first half of the year, the cash ratio was 77.
7%, an increase of 4 per year.
The total of 9 bills and accounts receivable increased by 3 from the end of 18 years.
6.8 billion, inventory increased by 0.
27 trillion, advance receipts decreased by 0.
4.7 billion; payout ratio is 69.
8%, a substantial increase of 15 over the same period last year.
For 9 units, bills and accounts payable increased by 1 compared with the end of 18 years.
32 trillion, advance payment increased by 0.
Adequate orders in hand ensure growth growth.
The company’s business volume in 2018 was 64.
1 ppm, an increase of 24 in ten years.
8%, newly signed 40 in the first half of 2019.
0 million yuan, an increase of 18 in ten years.
8%, of which 33 were new undertakings in survey and design.
200 million, an increase of 13 in ten years.At 1%, the company has sufficient orders in hand, and through the policy shift to the infrastructure industry, the prosperity has gradually improved, and future performance conversion has better protection.
With high-end planning as the carrier, vigorously expand the national market.
Planning is the starting point of the industrial chain. It is of great significance to intervene in the subsequent design, construction and other businesses in advance. China Construction Engineering integrates developed regions to accumulate years of cutting-edge technical experience, successfully conducts high-end planning, breaks through multiple markets outside the province, and is a long-term nationalFirst-class foundation.
In the first half of 2019, the company adopted a series of innovative and major planning projects such as “Traffic Infrastructure Land and Space Control Plan” and “Jiangsu Comprehensive Three-Dimensional Transportation Network Plan”, which greatly promoted the experience of Jiangsu across the country and changed it toThe research technology is promoted to Inner Mongolia, Henan, Guangdong, Anhui and other provinces and relevant cities and counties.
At present, it has undertaken projects such as “Guangdong Province Comprehensive Three-Dimensional Transportation Network Planning”, “Pearl River Estuary Crossing Channel Planning and Layout Study”, “Guangdong-Hong Kong-Macao Greater Bay Area Comprehensive Transportation Planning” and other projects.”Research”, “Research on the Integrated Development of Shanghai-Soviet High-speed Rail”.
It is planned to repurchase shares to implement the employee shareholding plan, showing confidence in future development.
The company intends to implement share repurchase through centralized bidding. The size of the repurchase funds is not less than RMB 30 million and not more than RMB 60 million. If the maximum repurchase price is 14 yuan / share, the estimated repurchase amount is about 4.29 millionShares, accounting for 0 of the company’s total share capital.
92% will be used to implement the employee stock ownership plan in the later period, and the repurchase period will be within 12 months from the intervention of the board of directors.
Revise down profit forecast for 19-20 years, increase profit forecast for 21 years, maintain “overweight” rating: new vertical univariate, lower profit forecast for 19-20 years, increase profit forecast for 21 years, the company is expected to be 19-21 yearsNet profit was 4, respectively.
9.5 billion / 6.
09 billion / 7.
3.1 billion (the original value was 5 in 19-20 years).
20 billion / 6.
6.6 billion), with growth rates of 25% / 23% / 20%, corresponding to PE of 11X / 9X / 7X, maintaining the “overweight” level.