Central Design Institute (603357): Policies can achieve performance savings and expansion benefits

Central Design Institute (603357): Policies can achieve performance savings and expansion benefits
Matters: The company released its 2019 Interim Report to achieve operating income7.36 ‰, an average of 11 per ten years.35%; realize net profit attributable to shareholders of listed companies.180,000 yuan, ten-year average of 11.56%; achieve basic EPS 0.48 yuan. Policy constraints have led to increased performance, with significant performance in out-of-provincial expansion.The company’s revenue growth in 2019H1 was -11.35%, the extension of the revenue period is mainly due to land, environmental protection and other policy impacts resulting in project progress, and revenue cannot be recognized on schedule.From the perspective of the main sources of revenue, the Design General Institute, the holding joint stock company, the Survey and Research Institute, the seven-star test, the high-speed test, and the ZTE Supervision have realized revenue.0.6 million yuan (at least -24.70%), 1.180,000 yuan (ten years -9.92%), 0.4.5 billion (+36.36%), 0.44 trillion (ten years +29.41%), 0.2.5 billion (+4.17%).The Central Design Institute and the Survey and Research Institute are principally engaged in survey and design business, contributing the main revenue, merging the total revenue scale and the average proportion, and the inspection business keeps growing.From the perspective of market structure, the business in the province achieved revenue5.50,000 yuan (a year -16.96%), with an income share of 74.73% (decade -5.07 pct); revenue outside the province’s business1.8.6 billion (15 + 15.08%), with a revenue share of 25.27% (decade +5.07 pct).In the initial period, the company’s revenue in the province decreased, mainly due to the Anhui transportation industry’s temporary constraints due to land, environmental protection and other approval requirements, high-speed, road network and water transportation investment has been suspended, the project is advancing.The company’s business outside the province has grown steadily, and its business area has expanded effectively.Preliminary company achieved net profit attributable to mother 2.1.8 billion, a ten-year growth rate of -11.56%, mainly due to supplementary revenue due to policy reasons. The gross profit level of the main business increased, and the company’s net profit margin remained high.Reporting the average, the company’s gross sales margin was 51.06%, an increase of 2 per year.74 pct, mainly due to the decrease in foreign labor procurement, of which the Design Institute, the Transportation Survey Institute, the seven-star test gross margin average value increased, respectively, 56.25% (decade +8.39), 51.13% (decade +8.78), 27.40% (decade +6.44 pct), the gross profit margin of the survey consulting and testing business has increased significantly, and the gross profit margin of high-speed inspection and ZTE supervision has improved, being 20 respectively.74% (decade -4.92), 22.86% (year -4.76 pct).In terms of period expenses, the company’s period expenses 8 are implemented.52% (decade +1.07 pct), the increase in expense ratio was mainly due to the increase in management and research and development expenses, of which management expenses decreased by 4.79% (ten years +1.78 pct), R & D expenses 2.72% (decade +0.47 pct), financial expenses expenditure -0.54% (decade -0.21 pct), sales expense ratio 2.61% (decade +0.24 pct).In terms of net interest rate and ROE, the net interest rate for this period was reset to zero.20 to 29.45%, still at the highest level of the same period in the past five years, in which the proportion of credit impairment losses increased.The current ROE (expected) is 9.72%, compared with the same period last year3.15 pct, the tilt caused by its net interest rate, asset turnover rate and negative interest rate. Operating cash inflows decreased and the asset-liability ratio continued to decline.In terms of cash flow, the net cash flow from long-term company operating activities is -0.79 trillion, an increase of 442 around one year.77%, mainly due to the decrease in the collection of budget items; the net cash flow from investment activities was zero.460,000 yuan, an annual increase of 516.59%, mainly due to the increase in the amount recovered from bank wealth management products; the net cash flow from financing activities was -1.32 ppm, an increase of 27 a year ago.92%, mainly due to the increase in cash dividends.In terms of capital structure, the company’s assets and liabilities were restructured at the end of the reporting period30.61%, a decrease from the same period last year.94 pct, the lowest level since 2015; such as checking the asset-liability ratio after excluding advance receipts, the end-period asset-liability replacement of 24.20% (one year-0.19pct), debt ratio continued to decline. The channels with excellent qualifications are stable and may benefit the construction of the Yangtze River Delta and the infrastructure space in the province in the long run. The company has comprehensive qualifications for comprehensive engineering survey, Grade A for highway industry design, Grade A for water operation industry design, multiple professional grades for municipal industry, and Grade A for construction industry. Its business covers the entire industry chain, and it has rich experience in major complex projects and technology.The competition is significant. The stakeholder controlling shareholder, Transportation Holding, is an important investment platform for the province’s internal transportation construction projects. As the only survey and design unit of the group, the company has a clear advantage in taking orders.As of the end of the reporting period, the company has 31 orders in hand.99 million yuan, about 1 in 2018 revenue.94 times, a lot of excess orders in hand.The initial company has newly developed 18 markets above the prefecture-level level and newly signed contracts outside the province in 2019H1.380,000 yuan, a growth rate of 17 in ten years.20%.The gross profit of the main survey and design business continued to increase, and the net interest rate remained at a high level. According to the “Thirteenth Five-Year Plan for Development of Transportation in Anhui Province”, the scale of major transportation infrastructure investment will reach 300 billion from 2017 to 2021. Recently, Anhui Province has prepared and implemented the “Outline of the Implementation of the Yangtze River Delta Regional Integrated Development Plan of Anhui Province””Plan”, according to the integrated development plan, Anhui actively integrated the Yangtze River Delta, the recent major infrastructure projects interconnected with each other to accelerate the implementation.In the long run, the province’s policies are expected to be gradually resolved. The company at the front end of the industrial chain is expected to benefit from the province’s vast infrastructure market demand and the incremental space brought by the integration of the Yangtze River Delta. The market size continues to increase. Investment suggestion: Subject to the internal approval policies of Anhui Province, the replacement of the company’s expressways, national and provincial highways, and water transport projects according to the original plan may lead to the company’s project progress in 2019, new breakthrough orders are less than expected, and some project revenue recognition is postponed.We have lowered the company’s performance forecast 北京桑拿 and expect to achieve revenue of 18-20 in 2019-2021.2.1 billion, 21.53 ppm and 25.48 ppm, with 10-year growth rates of 10.4%, 18.2%, 18.3%; Estimated net profit 5.1.2 billion, 6.1 billion and 7.31 ppm, with annual growth rates of 17 respectively.3%, 19.1%, 19.8%.The company’s EPS is expected to be 1 in 2019-2021.13 yuan, 1.34 yuan and 1.61 yuan, PE is 10 respectively.5 times, 8.8 times and 7.4 times, PB is 2 respectively.0 times, 1.7 times, 1.4 times.We maintain Overweight-A investment rating with a six-month target price of 16.6 yuan, equivalent to 14 in 2019.7 times expected P / E ratio estimate. Risk warning: the risk of severe macroeconomic fluctuations; the scale of infrastructure investment; the policy advancement is less than expected; new breakthrough orders and performance are less than expected; the risk of increased 重庆耍耍网 competition in the industry.

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