\u3000\u3 Shengda Resources Co.Ltd(000603) 018 China Design Group Co.Ltd(603018) )
Q1’s profit exceeded expectations, and the share repurchase demonstrated development confidence and value recognition. In 2022q1, the company realized an operating revenue of 920 million yuan, an increase of 14% at the same time; The net profit attributable to the parent company was 90 million yuan, an increase of 18% at the same time, exceeding the market expectation; The deduction of non performance increased by 20%, and the operating performance was excellent. In the case of repeated Q1 epidemic, the company actively overcame the impact of the epidemic, accelerated the project promotion through online office and other ways, and achieved rapid profit growth. Q1’s new business volume was 2.73 billion yuan, an increase of 35.5% at the same time. Under the background of the continuous increase of economic downward pressure and the continuous increase of steady growth policy, design, as the forefront of the infrastructure industry chain, has significantly increased the amount of order information. As a leading enterprise in infrastructure design, the company’s newly signed orders have increased rapidly, and it is expected to maintain a rapid growth trend in the year. Based on the company’s confidence in future long-term development and recognition of its own value, the company announced that it plans to repurchase 30-60 million yuan of the company’s shares for subsequent equity incentive or employee stock ownership plan, and the repurchase price shall not exceed 11 yuan / share. At present, the company is positioned as an “innovative technology platform company with planning and design as the entrance”. In the future, it plans to actively promote the development of “digitization”, “platform” and “industrialization”, vigorously promote the development of new specialties, new product lines and new business models, and continue to create a new driving force for growth.
Gross profit margin and net profit margin increased, R & D investment continued to increase, and cash flow outflow narrowed slightly. The gross profit margin of 2022q1 company is 31.1%, yoy + 0.16 PCT, and the gross profit margin remains basically stable. During the period, the expense rate was 20.3%, yoy + 0.7 PCT, of which the sales / management / R & D / financial expense rate changed by – 0.7 / + 0.6 / + 0.9 / – 0.2 PCT respectively. The decrease in the sales expense rate is expected to be mainly due to the decrease in the travel and other expenses of sales personnel under the epidemic environment; The increase in R & D expense rate is expected to be mainly due to the company’s continuous increase in R & D investment in new businesses such as digital design and smart construction in order to promote business transformation and development. The net interest rate attributable to the parent company is 10.2%, yoy + 0.3 PCT. Q1 company’s net operating cash flow outflow was 296 million yuan, the outflow narrowed by about 30 million yuan year-on-year, and the cash flow improved slightly. The cash to cash ratio / cash to pay ratio is 149% / 113% respectively, and yoy-4 / – 16 PCTs.
Jointly set up a joint venture with Shenzhen Youjia to develop new car routes and cooperate with automatic driving. The company announced that it plans to establish a joint venture with Shenzhen Youjia, a leading developer of intelligent driving solutions in China, to establish a digital transportation service provider, Huayou Zhihang (the company invested 30 million yuan, with a shareholding ratio of 50%), so as to promote the development of a “car road cloud” intelligent transportation ecosystem combining intelligent vehicles, roadside intelligent facilities and cloud computing. In recent years, through digital transformation, the company has created strong technical advantages in the fields of smart highway, smart city, smart parking and smart bus, and has accumulated a series of achievements; Shenzhen Youjia has leading advantages in environmental perception, multi-sensor fusion of automatic / semi-automatic driving, intelligent Internet connected vehicle on-board equipment oriented to vehicle road coordination direction and v2x (vehicle to everything) automatic driving Internet solution. This cooperation is expected to give full play to the advantages of both sides, create landing application scenarios such as highways, urban roads, ports and airports and smart parking, promote the landing of vehicle road collaborative automatic driving industry, and create a new engine for the growth of the company.
Investment suggestion: we expect the net profit attributable to the parent company in 20222024 to be RMB 710 / 820 / 940 million respectively, with a year-on-year increase of 15% / 15% / 14% (CAGR in 20212024 is 15%), EPS to be RMB 1.04/1.20/1.37 respectively, and the corresponding PE of the current stock price to be 7.8/6.8/5.9 times respectively, maintaining the “buy” rating.
Risk tips: the steady growth policy is less than the expected risk, the epidemic impact is more than the expected risk, the bad debt risk of accounts receivable, the development of new businesses such as digitization is less than the expected risk, etc.
