Sinoma International (600970) 2018 Annual Report Comments: New Gross Margin High Exchange Rate, Impairment and Redistribution for Common Thickening Results
Benefiting from the net exchange gains and impaired rebates, the company’s internal synergy and fine-grained management have made significant progress, and the gross profit margin of the main business has reached a new high, resulting in a 40% increase in performance.
Considering that the company’s main business of cement engineering has solid advantages and diversified development is smooth, at the same time, the investment along the “Belt and Road” may pick up and maintain the “Buy” rating.
Net profit attributable to mother + 40%, net exchange gains, impaired and regained common thickening performance.
The company achieved operating income of 215 in 2018.
0 ‰, +9 for ten years.
96%; net profit attributable to mother 13.
68 ppm, +39 for ten years.
98%; corresponding to EPS 0.
78 yuan, +39 for ten years.
3%; if net exchange gains are not considered1.
32 ppm, impaired flushed back to 1.
26 trillion non-economic projects, the company’s net profit after deduction in 201811.
9.3 billion, the same caliber +13 for the next ten years.
The company’s main business of engineering 武汉夜生活网 has been advancing steadily, operation and maintenance have continued to make efforts, and engineering construction / equipment manufacturing / environmental protection / production operation management / other projects have achieved gross profit29.
900 million / 4.
700 million / 2.
4 billion / 1.
4 billion / 1.
0 million yuan (+37% /-31% / + 8% / + 23% / + 8% a year ago).
After the merger of the two materials, the company’s internal collaboration has been continuously optimized, and the main business has continued to exert its strength. We believe that in 2019, the company may further promote territorial operations, promote the ECP + M model and operation and maintenance business, and expand environmental protection and coordinated disposal of cement kilnDevelopment, to maintain steady growth judgment in 2019.
Gross profit margin +1.
75% to 18.
56% hit a new high, the expense ratio decreased, and the net decrease in operating cash flow decreased.
The company’s internal collaborative optimization further promotes refined management, and supplements the settlement of multiple high-margin projects such as Tianjin Company and Sinoma Construction, with a gross margin extension of +1.
75% to 18.
56%, of which the gross profit margin of engineering construction business is +2.
83 pcts up to 17.
The company’s three expenses cost 6%, -4 per year.
6 pcts; benefit from net exchange income for the year1.
3.2 billion yuan, financial expenses are -2.
0 million, compared with the same period last year 2.
Net cash flow from initial operations decreased by 16.
2 trillion, 3 less than last year.
The new tier order has improved; the growth rate of the “Belt and Road” investment may pick up.The value of newly signed contracts in 2018 was 31 billion yuan, a decrease of 14% over the previous year; the single-income ratio in the new decade was 1.
59 times, compared with the previous year 1.
9 times contraction; of which, the value of newly signed overseas contracts was US $ 22.1 billion, once it fell by 24%, or it may be related to the historically low growth rate of the total value of newly signed contracts along the entire “Belt and Road” project.It gradually picked up in July 2018. Based on the empirical assumptions that the overseas project turnover and investment lags behind the new contract signing for 7 months, the second “Belt Road” summit is approaching next month.The company’s overseas operating environment may improve.
Risk factors: exchange rate risk; 2.
Geopolitical risks; 3.
Project advancement was less than expected risk.
Investment suggestion: benefit from net foreign exchange gains and impaired write-backs, the company’s internal synergy overlaps, and refined management has made significant progress. The main business’s gross profit margin has reached a new high, resulting in a 40% increase in performance.
Affected by the external environment, the new long-term single growth rate fell.
Considering that the company’s main business of cement engineering has solid advantages and diversified development is smooth, meanwhile, investment along the “Belt and Road” may rebound, we maintain the company’s EPS forecast for 2019/20 to 0.
01 yuan, plus 1 EPS forecast for 2021.
14 yuan, maintain “Buy” rating.