Guangtian Group (002482): Weak repayment results in lower-than-expected results down to neutral
Investment suggestion We downgrade Guangtian Group to “Neutral” and lower our target price by 9% to 5.
The reasons are as follows: Guangtian Group’s 2018 results exceeded expectations.
The company achieved revenue of 144 in 2018.
0 ppm, an increase of 14 per year.
9%; net profit attributable to mother 3.
500 million, an annual decrease of 46.
1%, due to the deterioration of the payment, the performance exceeded our expectations.
The initial financial expense ratio is increased by up to 1.
8ppt, mainly due to account receivables factoring and bill receivables discount handling fee2.
1 ppm; asset impairment losses increased by up to 352%, mainly due to the increase in bad debt provisions due to an increase in accounts receivable that exceeded the credit period; at the same time, a high base resulted in a reduction in investment income of 84%; the above factors together led to a reduction in the company’s net interest rate by at least 2.
7ppt to 2.
4%, the lowest level since listing.
The initial net operating cash inflow is reduced by 6 per year.
0 ppm to 4.
5 trillion, mainly due to changes in working capital.
The decoration construction main business has sufficient orders in hand.
The gross profit of the company’s decoration project increased strongly by 53% in 2018, mainly due to the steady growth in revenue growth and the reduction in the cost of raw materials and the improvement in gross profit margin brought by refined management.
In 2018, the company’s overall / public outfit / refined decoration in the new year increased by 47% / 18% / 74% respectively, maintaining a rapid growth overall; 230 million unfinished orders at the end of the year, equivalent to 2018 revenue.
6 times, keep sufficient, and provide guarantee for the company’s main construction business to continue to grow steadily.
Considering cash flow control, the company may take the initiative to increase its performance.
The deterioration of the company’s cash flow from operating activities and the change in the ageing structure in 2018 reflect that the company’s downstream owners are still facing some pressure on repayment.
We expect that due to the consideration of controlling leverage and financial risks, the company may actively anticipate the pace of performance growth in order to achieve multiple healthy operating cash flow conversion leverage to control at multiple healthy levels.
What makes us different from the market?
The judgment on the growth rate of performance under the tight cash flow background of the company is more cautious.
Potential catalyst: The situation of repayments has further deteriorated.
Earnings Forecast and Estimates Due to the worse-than-expected return situation, we have lowered our 2019E attributable net profit forecast by 49% to 4.
0 ppm, net profit attributable to mothers by 2020 4.
400 million (10% year-on-year increase).
The current consensus of the company corresponds to 24 in 19 years.
2x P / E.
We cut our 夜来香体验网 target price by 9% to 5.
73 yuan, corresponding to 19 times 22 times P / E, followed by the current 9%, downgrade to “neutral”.
Risk cash flow has further deteriorated.