Longyuan Construction (600491): High performance and profitable Private PPP leader estimated to be flexible
This report reads: The company ‘s 2018 increase in net profit attributable to mothers in 2018 is in line with expectations. As a private PPP leader, the company will continue to benefit from the PPP policy shift and credit improvement. The steady increase in performance in 2019 can be expected. Investment Highlights: Maintain overweight.The 2018 performance forecast is attributed to the mother’s net profit9.1-9.700 million (the same increase of 50-60%) in line with expectations, maintaining the forecast of EPS for 2018-2020 is 0.60/0.79/0.98 yuan, a growth rate of 53/30/24%; 淡水桑拿网 considering the PPP sector’s estimated central upside and the company’s leading premium, a 13x PE estimate for 2019 is given, which corresponds to a target price increase of 10.27 yuan (original 8.58 yuan), 37% space, 2018-2020 17.1/13.0/10.5 times increase. The PPP policy warming and the central government’s efforts to improve the financing prospects of private enterprises continue to benefit the company as a private PPP leader.1) In the fourth quarter of 2018, the new storage / landing scale in a single quarter may reach 2, accounting for 35% / 75%, indicating that the inflection point of the policy has arrived, and it will be added in 2019.5/2.8 trillion is good for the company’s newly signed PPP orders to increase. 2) With the gradual improvement of the internal credit environment and the central government’s continued guidance of financial institutions to increase support for private enterprise financing, the company’s financing rhythm has promoted a significant improvement in improving the speed of order placement; 3)The integration of the Yangtze River Delta catalyzed the company’s benefits. The company has sufficient orders on hand and focuses on the developed provinces and cities in Southeast China with higher quality. The performance in 2019 continues to rise but it is estimated to be at a low price and high cost performance.1) In the new year of 2018, the orders of 37.2 billion yuan / 25% decrease are due to the company’s active control of risk selection orders. The restructuring company has an outstanding order in hand which is expected to exceed 70 billion yuan / order revenue ratio3.3 times; 2) Long Yuanming City / Hangzhou City Investment to take advantage of PPP talents to ensure compliance operation / financing promotion / profit control of PPP projects, and more sensitively grasp the benefits of warming PPP policy and credit improvement;Cost of shareholding 11.31 yuan / share (51% upside down), the price increase in April 2018 was set at 10.67 yuan / share (inverted 42%). In June 2018, the controlling shareholder and executives increased their holdings by 20 million yuan / cost6.5-6.7 yuan; 4) Institutional positions at the end of 2018 were only 1.31% hit a record low. Catalysts: Social financing data continued to improve, PPP regulations were 杭州龙凤网 promulgated, and financing rates continued to fall. Risk warning: social financial data expansion, policy rectification, PPP financing costs, etc.