Tunnel Shares (600820) 2019 Interim Report Review: Decreased investment income and bad debt dragged down the performance of the rails significantly improved

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Tunnel Shares (600820) 2019 Interim Report Review: Decreased investment income and bad debt dragged down the performance of the rails significantly improved

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Tunnel Shares (600820) 2019 Interim Report Review: Decreased investment income and bad debt dragged down the performance of the rails significantly improved
2019H1 revenue +15.8%, net profit attributable to mother +4.8%, investment income decreased and accrued bad debt dragged down the growth of net profit; the new growth in 2019H1 is steadily increasing, and the rail transit has significantly improved.Taking into account the mild recovery of infrastructure and the preliminary implementation of regional rail transit plans and better sustainability, we maintain 2019 EPS forecast of 0.70/0.78/0.86 yuan, maintain “Buy” rating. 2019H1 revenue +15.8%, net profit attributable to mother +4.8%. The decrease in investment income and the accrual of bad debts dragged down the growth rate of net profit, and the construction business income grew steadily.The company’s 2019H1 revenue was 163.1 ‰, +15 per year.8%; net profit attributable to mother 8.8 ‰, +4 for ten years.8%. The growth rate of net profit is lower than the growth rate of income, which is mainly due to the decrease in investment income and accrual of bad debt losses; corresponding to EPS 0.28 yuan, +3 a year.7%.In terms of business, construction / design / operation revenue was 151.2/6.8/2.8 ‰, +19 a year.8% /-5.7% / + 18.8%. Gross profit margin dropped slightly.5pct to 12.2%, period expense ratio -1.6 pieces to 7.4%.2019H1 company gross profit margin 12.2% per year -0.5pct, construction / design gross margin decreased by 0.6/3.7% to 10.0% / 26.8%, while operating business gross margin increased by 16.8% to 60.4%.Expense rate for half a year -1.6 pieces to 7.4%, sales / management / R & D / financial expenses 0.1% / 3.6% / 2.0% / 1.8% a year + 0 / -0.5 / -1.4 / + 0.4pcts, the R & D investment in the first half of the year decreased significantly (-33%).Company investment income 4.3 trillion, -22% a year; accrued bad debt loss of 52.68 million yuan (110,000 yuan in the same period last year).Net operating cash margin 8.20,000 yuan (net decrease of 20 in the same period last year.900 million); net reduction in investment cash by 30.0 million yuan (net decrease of 27 in the same period last year.9ppm), mainly due to increased investment in PPP projects; net cash inflow from financing.20,000 yuan (net inflow of 26 in the same period last year.900 million). The single-year growth rate in the new quarter of 2019H1 is slightly slower than that of early Q1. Local orders in Shanghai have increased rapidly, and the construction of housing has maintained a high growth. Rail transit has significantly recovered.The new millennium in 2019H1 is 25.7 billion (times +5).1%), the growth rate dropped 4 in 19Q1 earlier.One.Including construction / design order 236.8/20.60,000 yuan (ten years +3.8% / + 22.2%).From a regional perspective, Shanghai’s internal and external business is 132.0/99.2 ‰, +28 a year.6% /-17.4%; domestic / overseas business is 231.2/5.600 million, ten years +3.8% / + 7.3%; from the perspective of structure, rail transit / municipal / energy / road / house / other business is 41.5/68.6/19.4/39.9/66.9/0.500 million (+11% / + 14% /-40% /-38% / + 119% /-83%), of which the track transfer order Q2 was extended by +67 in a single quarter.6%, benefiting from the relevant regional rail transit planning landed one after another, the rail transit significantly improved at a low base.The company has ample orders in hand, major projects are making good progress, and the new progress in the first half of the year has increased steadily. The future performance is deterministic. The incentive mechanism is straightened out, and it is expected that the enthusiasm will be effectively mobilized; the successful issuance of 3-year corporate bonds provides strong support for business development.In December 2018, the company’s board of directors resolved to pass an incremental performance incentive plan, with constraints including a net profit of 19-20 in 2018-20.6/21.3/23.0 million yuan, a CAGR of 8 over the three years in 2017.3%.According to our calculations, the maximum incremental performance rewards for 2018 may reach 15.85 million 都市夜网 yuan. Considering the coverage of major executives, incentives are expected to effectively motivate the company.In addition, the company successfully issued 3-year 2.5 billion corporate bonds in May with an interest rate of 3.80%, long-term low-interest corporate bonds are expected to provide strong support for the company’s business expansion. Risk factors: The risk of rail transit construction exceeding expectations; PPP landing is less than expected. Investment suggestion: 2019H1 revenue +15.8%, net profit attributable to mother +4.8%, investment income decreased and accrued bad debt dragged down the growth of net profit; the new growth in 2019H1 is steadily increasing, and the rail transit has significantly improved.Taking into account the mild recovery of infrastructure and the gradual implementation of relevant regional 杭州桑拿 rail transit plans and better sustainability, we maintain the EPS forecast for 2019-21 to 0.70/0.78/0.86 yuan, corresponding to PE is 10.0x / 9.0x / 8.2x, maintain “Buy” rating.