Zhonghe Technology (000925) Half-yearly Report Review 2019: The rapid increase in rail transit business drives the company’s performance growth signal system, a new breakthrough, and the proportion of self-research is increasing
Event: Zhonghe Technology released the 2019 Interim Report, and the company achieved operating income in the first half of 201910.
49 trillion, an increase of 31 in half a year.
79%, realized net profit of 24.74 million yuan, an increase of 51.
Opinion: The growth of rail transit business drives the company’s revenue growth.
Zhonghe Technology reports separately for the two business segments of smart transportation and energy conservation and environmental protection. The company’s smart transportation segment achieved operating income.
75 ppm, an increase of 74 in ten years.
56%, of which the rail transit signal system achieved revenue4.
23 ppm, an increase of 62 in ten years.
39%, gross margin is 34.
48%, a decrease of 1 from the same period last year.
57 pct, automatic ticket sales system realized income 2.
470,000 yuan, an increase of 196 in ten years.
16%, gross margin is 24.
46%, an increase of 4 over the same period last year.
With 71 PCTs, the mobile payment business realized revenue of 4.76 million yuan, a decrease of 88 per year.
85%, gross margin 78.
56%, an increase of 3 over the same period last year.
88 pct, the integrated gross profit margin of the intelligent transportation sector is 31.
12%, a decrease of 5 over the same period last year.
68 pct, mainly due to changes in business structure.
The company’s energy-saving and environmental protection segment realized operating income3.
7.4 billion, a decline of 8 per year.
63%, gross margin is 26.
77%, an increase of 4 over the same period last year.
The construction of urban regulations is in full swing, and the company’s rail transit supplementary orders will increase by 27.
51%, the proportion of self-research has increased.
In the first half of 2019, the scale of urban rail construction continued to expand and the speed of approval was increased. The Development and Reform Commission approved the next round of planning and construction of the four cities (Wuhan, Zhengzhou, Chengdu, Xi’an), involving a total of 30 cities with a total mileage of 684.
65 kilometers with a total investment of 4894.
In the first half of the year, the company’s rail transit sector will provide new contracts.
47 trillion dollars, an annual increase of 27.
51%, of which the signal system order amount is 13.
12 ppm, an increase of 123 in ten years.
Newly signed 4 new signal system lines, including 300 million self-developed systems, and the proportion of successful bids reached 77.
74%, further improvement.
The environmental protection sector has sufficient orders in hand, and its performance is expected to stabilize and rebound in the second half of the year.
New orders for water treatment business are picking up. Among them, 5 new operating projects, 15 new EPC projects, and new contracts 1 were added to Haituo Environment in the first half of the year.
51 billion, Suzhou Kehuan new orders3.
7.9 billion, with orders in hand5.
7.3 billion, and the order cycle is within one year, it is likely to contribute performance in the second half of the year.
The semiconductor business Zhejiang Haina has replenished orders of 78 million, and has basically completed the heavy interruption of the antimony single crystal growth project and the heavily doped crystal single crystal growth project. The second half of the year is expected to start the heavy replacement single crystal growth project.
The expense ratio has a downward trend, completing the long-term healthy development of equity incentive assistant companies.
Company expenses during the reporting period22.
14%, still at a high level, but more than the previous decline.
Among them, the sales expense ratio is 2.
45%, a decrease of 0 from the same period last year.
23 pct, 武汉夜生活网 management cost rate 8.
95%, an increase of 0 from the previous year.
3 pct, mainly due to the increase in employee compensation, R & D expense ratio of 6.
40%, a decrease of 0 from the previous year.
85 pct, financial expense ratio 4.
35%, a decrease of 2 from the previous year.
In the reporting year, the company’s completion rate in 2019 is the stock incentive technology for stock investment and acquisition, and the first issuance registration of stocks and subsidies. The implementation of distribution incentives binds the company’s management team and business backbone benefits, which helps the company’s long-term healthy development.
Profit forecast: We maintain that the company’s EPS for 2019-2021 will be 0.
55 yuan, corresponding to PE is 25/15/12 times. Considering the company’s 武汉夜生活网 orders in hand, combined with the company’s historical forecast level and the comparable company’s forecast level, Zhonghe Technology will be given an estimate of 30-35 times in 2019, maintaining a target price range of 8.
45 yuan, maintain the “recommended” level.
Risk warning: The pace of bidding for rail transit projects is rapid, and the company’s market development is less than expected.