Sinoma International (600970): High revenue growth overlaps with high dividend yield group synergy is expected

Sinoma International (600970): High revenue growth overlaps with high dividend yield group synergy is expected

The 杭州桑拿 Q3 performance was in line with expectations, and the high return rate + order protection multiples highlight the investment value company’s first three quarters of 19 revenue / attributable net profit 169/11.

5 ‰, +19 a year.

3% / 14.

1%, net of non-attributed net profit11.

300 million, previously +7.

5%; 19Q3 achieved revenue / net profit of 56/400 million yuan, + 36% / + 11% in the past, and performance basically met expectations.

The company’s new contract value in the first three quarters reached 225.

3 trillion, a year-on-year increase of 27%. As of the end of September, the outstanding contract value was 440 trillion, which was 2x of 18 years of income, and the expected dividend yield in 19 was as high as 4.

9%, considering that the revenue growth exceeds expectations, raised the EPS forecast for 19-21 to 0.



12 yuan (original value: 0.



06 yuan), the target price of 8.


79 yuan / share (9-11x target PE in 2019), maintain “Buy” rating.

The improvement in domestic orders drove high revenue growth, but the gross profit margin dropped year by year in 19Q3. The company’s revenue was YoY + 36.

3%, the growth rate was significantly higher than the previous Q2 (19Q2 was 12).

8%), we expect to be related to the rapid growth of domestic revenue.

19Q3 company’s overall gross profit margin 16.

1%, a decrease of 3 per year.

7pct, as the gross profit margin of domestic projects is significantly lower than overseas, overall gross profit increased by 10.


19Q3 company period expense ratio 6.

1%, an increase of 3 per year.

0pct, in which the sales / management (including R & D) expense ratios are -0.

5 / -2.

2pct, but the financial expense rate is +5 per second.

7pct, mainly due to the higher exchange income in 18Q3. Considering that the company conducts some foreign exchange forward hedging, it will cause some losses when the RMB depreciates. We expect the company to achieve zero exchange income in 19Q3.

5.2 billion (vs. 18 in 1).

3.5 billion), net exchange gains 19Q3 less than 18Q3.

8.3 billion, accounting for 1 of the 19-year forecasted revenue.


19Q3 company operating cash flow1.

6 trillion compared with the same period last year (-11.

(US $ 2.5 billion), a significant improvement, 19Q3 cash ratio of 94%, an increase of 4pct, cash payment ratio of 98%, a decrease of about 26pct.

Since the second quarter, operating cash flow has continued to be positive.The decrease in operating cash flow in 2018 was mainly due to the centralized payment to the subcontractors of the Egyptian GOE Beni Suef project in the same period last year, and the Egyptian project amount was 78.

45 ppm (including financial costs) is a ten-year payment item.

The cash flow during the construction period of the project in 19 years has ended, and after that, there will be 700 million + recoveries every year. The company’s 19-year cash flow promotes normalization.

The growth rate of new contracts signed in 3Q19 was 29%, and the number of newly signed contracts in the first three quarters of domestic contract growth was 225.

30,000 yuan, an annual increase of 27.

1%, the newly signed contract value in 19Q3 was 7.3 billion yuan, a year-on-year increase of 29.

2%, of which 58 were new engineering contracts.

500 million, previously + 37%, equipped with 9.

4%, -8% per year, environmental protection 4.

100 million, previous + 51%, production operations 0.

31 ‰, one year + 44%, internal contract 23.

700 million, previously + 68%, overseas contracts 49.

300 million a year + 16%.

Raise the profit forecast, the group can expect synergy, maintain the “buy” rating company announced the proposed 30 million yuan capital increase in Beixin Revenue Co., Ltd. to obtain 26.

2% equity can increase influence in developing countries and surrounding areas and obtain investment income. It is expected that the company will participate in more projects in the internationalization of group brother companies in the future and jointly 重庆耍耍网 expand the overseas market.

In the new millennium, the company’s individual items have grown rapidly, with high protection ratios for orders in hand, and high dividend yields. Taking into account the company’s higher Q3 revenue growth rate, it raised its EPS forecast for 19-21 by 0.



12 yuan (original value: 0.



06 yuan), with reference to comparable company 10x 2019 PE, given 9-11x 2019 target PE, target price 8.


79 yuan / share (previous value: 8).


64 yuan / share), maintain “Buy” rating.

Risk Warning: The growth rate of new growth orders is lower than expected, the gross profit margin is lower than expected, and exchange rate fluctuation risks.