Hongrun Construction (002062) 2018 Annual Report Comment: Non-brighter revenue deduction of private enterprises and municipal rails leads to non-obvious long-term development
Investment Highlights: Event: The company released its 2018 annual report and actually realized revenue of 98.
8.8 billion, an increase of 21.
67%, net profit attributable to mothers was 300 million, an increase of 10.
47%, achieving a deduction of 4.
2.3 billion, an increase of 55.
11%; revenue and deductions are growing at an impressive rate, and the growth rate of returnees involved in the lawsuit was lower than expected but did not hinder long-term development.
The company’s Q4 revenue / attribution / deduction non-growth rate is 36% /-11% / 139%, with multiple changes of 61pp / -29pp / 93pp, a chain change of 9pp / -21pp / 130pp, previous revenue / attribution / deductionThe non-growth rate is 22% / 10% / 55%, which changes 29pp / -6pp / 23pp each year. The revenue and deduction of non-growth rate are dazzling. The growth rate attributable to the mother is lower than expected.Mention estimated loss 2.
6.1 billion is classified as non-operating expenses. We believe that the company is currently focusing on the municipal railway junction, and this provision has not hindered the overall long-term development.
At the same time, minority shareholders’ profit and loss was -1.
2 billion, a decrease of 550,000 from the previous year, increased to return to the mother; the net interest rate caused by the lawsuit decreased, and the cash flow from development expenditure continued to replace.
Initial gross profit margin 12.
38%, with an increase of 2pp; sales / management / finance rate 0.
11% / 4.
71% / 1.
32%, respectively -0.
2pp / 2.
6pp (R & D expense 2.
8.1 billion credits) /-0.
5pp, the period fee also increased by 73%, the rate is 5.
89% first increased by 1.
8pp; Impairment / investment net income is 16.16 million / 37.13 million, accounting for 8% of net profit.
2% / 18.
8%, the proportion decreased by 21 respectively.
1pp / up 7.
6pp; Non-operating expenses involved in the lawsuit 2.
64 billion, a significant increase of 2.
6 billion, hypertension rate 33.
66% increase by 6.
8pp and net interest rate 2% are reduced by 1.
4pp; cash payment ratio is 96% / 77.
4%, respectively changed -13.
7pp / 0.
5pp, operating cash flow 4.
A 100% reduction of 63% was due to the payment of a grant for the Shanghai Aoqiao Town Affordable Housing Project6.
Caused by 1.8 billion; net investment cash flow -5.
200 billion doubled, funded by high-speed rail projects; rejection rate 78.
89%, an increase of 2.
1pp; private enterprise municipal rail transit is warped, currently focusing on the Yangtze River Delta / municipal rail transit market, with abundant orders and rapid growth of the main business, which is conducive to making full use of the Shanghai, Suzhou and Hangzhou three rail transit projects.The company has dual special qualifications in construction and municipality, and has been deeply cultivating the Shanghai market for more than 20 years. It is the first private enterprise in China to perform shield construction. Rail transit business covers 18 cities. Now it has 35 shield equipment and gradually completes tunnel shield tunneling.160km, the forefront of residents.
In the early stage, the construction industry won 13.2 billion bids, which was 1 of the appropriate period of income.
3 times, of which 76% are railway transportation, including Hangzhou Line 3/4/7 and Suzhou Line 6.
At the end of the period, there were 26.6 billion orders in hand on payable income2.
The total reported construction / real estate / new energy income is 87.
800 million / 9.
5 billion / 1.
400 million, an increase of 28% /-14% /-1%; revenue from rail transit / municipal / building construction in construction business was 40.
8 billion / 34.
900 million / 12.
1 billion, an increase of 41% / 35% / 12%; East China revenue 79.
100 million increase by 43%, the proportion increased by 12pp to 80%; 2018H2 Development and Reform Commission newly approved 773.6 billion subways, including Shanghai (298.3 billion), Hangzhou (95.5 billion), Suzhou (93.3 billion), the company’s higher participation will continue to benefit; In 2018, the company launched an employee shareholding incentive plan, and has purchased total share capital4.
41%, expected to release vitality; profit forecast and investment rating: The company is expected to achieve operating income of 108 from 2019 to 2021.
40,000 yuan, 120.
75 billion, 136.
1.2 billion; net profit attributable to mothers is 3.
7.7 billion, 佛山桑拿网 4.
53 ppm and 5.
35 ppm; EPS is 0.
34 yuan, 0.
41 yuan and 0.
49 yuan, corresponding to PE is 13.
35X and 9.
Maintain the “Recommended” level.
Risk reminders: 1. Project progress is less than expected; 2. Market competition risk; 3. Financial risk.