On January 29, Arts Group Co.Ltd(603017) released the annual performance forecast for 2021. According to the announcement, affected by the liquidity risk of Evergrande group, the company expects to realize a net profit attributable to shareholders of listed companies of – 340 million yuan to – 400 million yuan in 2021. Excluding the impact of the proposed provision for impairment of goodwill of relevant subsidiaries, the company is expected to realize a net profit of about 81 million yuan attributable to the shareholders of the listed company in 2021. At present, the book value of the company’s goodwill is 647 million yuan. After the provision for impairment of goodwill is made this time, the goodwill will decrease significantly to 166 million yuan to 226 million yuan.
The company said that since this year, the performance of the real estate design business mainly undertaken by its subsidiaries Zhongheng Zhuo Chuang and huazao design has declined due to the increased regulation of real estate and the decline of real estate investment. However, after deducting the influence of dividend factors, the operating revenue and net profit of the company’s other main business segments except Zhongheng Zhuo Chuang and huazao design achieved positive growth in 2021. Facing the unfavorable situation of real estate design business, the company gives full play to its professional advantages in public buildings, modern industrial plants, green buildings and so on, and continues to strengthen market development in an all-round way. In 2021, the newly signed design contract amount of the group headquarters with public buildings and high-end industries as the main business direction was 1.230 billion yuan, an increase of 353 million yuan year-on-year, an increase of 40.26%, which effectively filled the long-term adverse impact of the decline of contract amount caused by the decline of real estate design projects on the whole group.
According to public information, Arts Group Co.Ltd(603017) group’s design business sector is comprehensive, including public buildings (such as creative and science and Technology Industrial Park, cultural and sports buildings, educational buildings, medical and health buildings, office buildings, hotel buildings, large complexes, historical blocks and characteristic towns, beautiful villages, etc.) Industrial buildings (such as modern industrial plant, biomedical industrial park, big data R & D center, logistics park, etc.), real estate business, etc.
In addition, by querying the announcements and public information of Arts Group Co.Ltd(603017) over the years, it can be found that as the first architectural design IPO company in China, Arts Group Co.Ltd(603017) has abundant cash flow and has implemented a large proportion of cash dividends in recent three years. From 2018 to 2020, the dividend yield of the company reached 3.02%, 4.13% and 6.44% respectively, of which the dividend yield in 2020 ranked among the top 20 listed companies of all a shares. Market participants believe that the impairment of goodwill will not affect the company’s cash flow, and the basis for the sustainable and healthy development of the company has not changed.
