Lingnan (002717): Improved cash flow diversified layout will benefit policy recovery and regional construction
Matters: The company released the third quarter report of 2019, and achieved operating income of 52 in the first three quarters.
$ 7.1 billion, a ten-year average of 7.
73%; realized net profit attributable to shareholders of listed companies.
500,000 yuan, 46 years ago.
71%, basic profit income is 0.
20 yuan / share.
The construction rate of newly-built cultural tourism projects has dropped, and the high base has targeted the decline in the first three quarters.
Since 2015, the company has developed the two major industries of ecological environment and cultural tourism through endogenous growth and extensional expansion. At the same time, it has strengthened the implementation of the strategy of water affairs and water environment.Environmental and cultural tourism orders quickly landed, the pan-entertainment PPP strategy continued to develop, and the company entered a high-speed development stage.
From 2016 to 2018, the company’s revenue increased by 35 each year.
05%; net profit attributable to mothers increased by 55 each year.
In 2019, under the pressure of many industries such as the economic downturn, tightening external financing, and PPP project specifications, the operating rate of new projects in the cultural and tourism sector has dropped sharply, and the company achieved operating income of 57 in the first three quarters.
1.2 billion US dollars, on the basis of a high base in the same period last year, an annual extension of 7.
In terms of quarters, the single-quarter revenue growth rate of Q1 to Q3 2019 was 11 respectively.
05% and -8.
84%, compared with the second quarter of 2019, the third quarter revenue decline has narrowed significantly.
Initially, the company realized net profit attributable to shareholders of the listed company.
500,000 yuan, 46 years ago.
71%, mainly due to the decline in revenue and profitability.
Profitability improved and operating cash flow improved.
In the total reported, the company’s comprehensive gross profit margin was 24.
37%, down by 1 every year.
94 pct, the company’s gross profit margin decreased or the main business’s gross profit margin decreased due to intensified market competition.
Expenses during the initial company period15.
91% (ten years +2.
The management expense ratio and financial expense ratio increased by 1, respectively.
37 and 1.
Finance costs increase by 38 each year.
34%, mainly due to the increase in project funding requirements leading to an increase in financing scale and corresponding increase in interest expenses.
The initial company’s net margin level has gradually decreased4.27 to 5.
98%, the decline in profitability was mainly due to the decline in gross profit margin and the increase in expense ratio during the period.
From the perspective of cash flow level, the company’s operating cash flow has improved, and the net operating cash flow is -1.
380,000 yuan, repeated less than the same period last year.
110,000 yuan, mainly due to the increase in business repayments of first-tier companies.
As of the end of the third quarter of 2019, the company’s monetary funds were 17.
US $ 6.6 billion, slightly higher than the same period of the previous year. Too much and too much capital in hand has consolidated the company’s development momentum and helped the rapid release of performance.
In terms of bond interest rate, the company’s 都市夜网 asset bond interest rate at the end of the period was 72.
76%, an increase of 0 from the end of 2019H1.
54 averages, an increase of 2. from the end of September 2018
The total of 79 was mainly due to the increase in short-term short-term borrowings and accounts payable.
The introduction of listed stock incentives, more order reserves, the future growth of the company is still worth looking forward to.
In 2018, the company launched a series of stock stock incentive plans, which are planned to grant 1493 to 217 middle managers and core business backbones of the company.
720,000 shares per share, the grant price is 6.
According to the budget stock exercise conditions, it is estimated that the company’s net profit growth after deductions for 2018-2021 will be 60%, 30%, 30% and 20%, respectively.
From a speed perspective, the company’s performance growth rate will be reduced by less than 30% in 2019-2021. This is a relatively rapid growth based on a high base, and the quality of growth is improved.The proportion of the company’s cultural travel business may increase, and once again improve the quality of the company’s development.
In 2019, the company tilted its key resources to developed coastal areas such as the Guangdong-Hong Kong-Macao Greater Bay Area, increasing the proportion of EPC projects and high-quality operating projects, and continued to obtain quality orders., Huangshan Xiuning and Lianzhou comprehensive improvement of water environment and other key projects.
According to the summary of the company announcement, the company has signed approximately 66 new major project orders since 2019.
6.6 billion, which is close to 80% of the company’s 2018 operating income. The company’s order reserve is relatively abundant, which provides a certain guarantee for the release of the company’s performance.
The company continues to diversify its layout. Under the pressure of the ecological environment construction industry, it will support the company’s overall profit growth during the downturn of the industry through the development of water affairs, water environment and cultural tourism business, which will help achieve higher quality growth in the future industry recovery period.To obtain higher performance flexibility.
Estimates and investment recommendations.
Due to the company’s revenue growth rate and period expenses increased, we adjusted the company’s profit forecast, and expect to achieve revenues of 89 in 2019-2021.
7.6 billion, 117.
58 ppm and 146.
9.8 billion, a year-on-year growth rate of 1.
9% and 20.
1%; net profit is 7 respectively.
2.2 billion, 9.
88 ppm and 118.
6.4 billion, the previous growth rate was -7.
9% and 20.
1%; EPS are 0.
47 yuan, 0.
64 yuan and 0.
77 yuan, dynamic PE is 10 respectively.
0 times, 7.
3 times and 6.
The company’s “second venture” strategy has been launched. At present, the company’s “big ecology + pan-amusement” layout covers the business sector layout of water management, water environment governance, ecological environment restoration, and cultural tourism. The synergy between the three business sectors is obvious, helping the companyRapid growth in the context of future industry recovery and the construction of the Guangdong-Hong Kong-Macao Greater Bay Area.
The company has sufficient funds, improved operating cash flow, increased proportion of high-quality orders, and better growth.
Maintain the company’s “Buy-A” rating with a target price of 7 yuan, corresponding to about 15 times PE in 2019.
Risk reminders: changes in PPP policies, rising interest rates, high receivables, market adjustments, shareholders’ reductions and other risks.