Under the policy guidance of “steady growth” and investment logic, the large infrastructure sector ushered in an outbreak after the year. On February 16, infrastructure concept stocks continued to rise sharply, and dozens of stocks rose by more than 10%.
In the hot infrastructure sector, Huitong group (603176), which just landed in the capital market at the end of last year, is undoubtedly the “prettiest”. It has harvested 23 price limits within 28 trading days after listing, which has soared more than 7 times compared with the issue price of 1.7 yuan / share. Up to now, Huitong group has reported a return of 13.64 yuan / share, with a market value of 6.4 billion yuan. If the investor is lucky to win the contract, it will pry the income of nearly 12000 yuan with the principal of 1700 yuan.
It is worth mentioning that the rapid rise of Huitong group is accompanied by a high turnover rate. From January 12 to February 15, 2022, the average daily turnover rate of the company was 26.32%. On February 16, the turnover rate reached 49.57%, and nearly half of the circulation discs were cleaned.
The share price soared, and Huitong group recently issued an announcement of share price changes, which was sent to the soft hand. After hours today, the company issued its 14th change announcement since listing, reiterating the trading risk of the secondary market and calling that the current stock price has seriously deviated from the fundamentals. In terms of P / E ratio, the latest rolling P / E ratio of Huitong group is 65.56, which is nearly 8 times the average p / E ratio of the industry.
In addition to the transaction risk, behind the bright share price of Huitong group, there is also a crisis of asset impairment and performance decline.
Since its establishment, Huitong group has always regarded highway, municipal, housing construction engineering construction and sales of relevant building materials as its main business, mainly focusing on the regional market of Hebei. At the same time, Huitong group has deeply cultivated business opportunities in the process of infrastructure construction in Beijing Tianjin Hebei and xiong’an new area. At present, the market has covered more than 10 provinces and cities, and has participated in the construction of more than 1700 kilometers of highways of all grades, Among them, the highway is more than 340 kilometers. In fact, in addition to the infrastructure sector, Huitong group also has the concept of “xiong’an New Area”, which has also become another weight for its rapid rise.
From 2018 to 2019, Huitong group’s performance experienced a sharp pull, with its operating revenue increasing from 1.62 billion yuan to 2.407 billion yuan, and its net profit rapidly increasing from 26.0398 million yuan to 90.594 million yuan, an increase of nearly 250%. In 2020, the company’s development tends to be stable, with revenue and net profit of 2.398 billion yuan and 96.3419 million yuan respectively.
On December 31, 2021, Huitong group landed in the capital market. Although its share price welcomed the “good start” in the year of the tiger, its performance fell against the trend.
According to the announcement, in the fourth quarter of 2021, the recovery of the company’s accounts receivable was less than expected, especially the poor collection of some long-term aging projects, resulting in an increase in the accrued impairment loss. It is estimated that the annual impairment amount accounts for 10% – 20% of the net profit of the previous year, which has a significant impact on the performance of the current year. After preliminary calculation, the company expects the performance of 2021 to decline compared with that of 2020.
Previously, in the prospectus, Huitong group has indicated the impairment risk of accounts receivable and contract assets, and made a preliminary prediction of the performance in 2021. By the end of September 2021, the book values of accounts receivable and contracts were 985 million yuan and 1.11 billion yuan respectively, and the amount of unrecognized revenue in hand contracts reached 2.136 billion yuan. Among them, accounts receivable mainly refer to the project measurement funds measured but not paid by the owner. Huitong group said that the company’s customers are local governments or their subordinate investment entities. Although they have good reputation, in extreme cases, there is still the risk of impairment of relevant assets. According to the notice in the prospectus, Huitong Group expects to realize an operating revenue of 2.25 billion yuan to 2.5 billion yuan and a net profit of 88 million yuan to 115 million yuan in 2021, with a change range of – 8.65% – 19.38% compared with 2020.
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