Shanghai Construction Engineering (600170) Company Research: Q3 Earnings Performance Significantly Accelerates Proposed Stock Repurchase for Incentives and Confidence

Shanghai Construction Engineering (600170) Company Research: Q3 Earnings Performance Significantly Accelerates Proposed Stock Repurchase for Incentives and Confidence

Q3 revenue and deductions significantly accelerated.

The company achieved operating income of 15.23 million yuan in the first three quarters of 2019, an annual increase of 32.

0%; net profit attributable to mother is 27.

2 ‰, an increase of 50 in ten years.

2%; net profit deducted from non-mother 20.

6 ‰, a year-on-year increase of 21%, exceeding market expectations.

Looking at the company’s Q1 / Q2 / Q3 quarterly revenue increased by 52% / 19% / 32% respectively, Q3 revenue growth accelerated; single-quarter non-attributed net profit increased by 16% / 8% / 44%, Q3 deductionThe significant acceleration in performance was mainly due to: 1) the significant acceleration in revenue.

2) During the period, the rate of expenses and taxes decreased, and asset impairment losses decreased.

3) The base in the same period last year was the lowest, and the single-quarter performance fell by 18%.

Gross profit margin and expense ratio decreased, and the impact of financial asset income weakened.

The company’s consolidated gross profit margin for the first three quarters was 9.

52%, a decrease of 1 per year.

54 pct, mainly due to 1) the start of new projects in this period was interrupted, and the initial gross margin was generally low.

2) The proportion of real estate projects with high gross profit margins has declined, and gross profit margins have decreased.

The project construction is expected to gradually enter the middle and late stages, and the subsequent gross profit margin is expected to stabilize and rise.

Expense rate during the period 6.

56%, down by 1 every year.

13 pct, of which the sales / management / finance / research and development expense rate respectively changed -0.

09 / -0.

35 / -0.

35 / -0.

34 pct. The decline in the expense ratio during the period was mainly due to the rapid growth of income and the relatively rigid expenses, which reflected the scale 成都桑拿网 effect.

Gains from changes in fair value of financial assets in the first three quarters.

5 trillion, single quarter in the third quarter may be 1.

600 million, reducing the impact on net profit.

Decrease in asset impairment losses by 1.

10,000 yuan.

The deducted non-net interest rate is 1.

35%, a decline of 0 every year.


Net operating cash flow was -121 trillion, which has been reduced several times compared with the same period last year.

7.5 billion, cash-to-cash / cash-to-cash ratios were 100% / 108%, YoY-7 / -10%.

The announcement intends to repurchase shares to stimulate confidence.

The company announcement intends to use no less than 0.

500 million, not more than 1.

10,000 yuan repurchase company stocks are all employee stock plans, the repurchase price does not exceed 4.

2 yuan /杭州夜网论坛 share, the number of shares repurchased at this price accounts for about 0 of the total share capital.

13% -0.27%.

On May 8 this year, 10 directors, including the president, vice president, chief accountant, and chief engineer, executives increased their holdings of 1.2 million shares in the company through the secondary market.


83 yuan / share.

The continuous increase in shareholdings and employee incentives demonstrate confidence in the company’s future development.

Leaders benefit from the acceleration of the integration of the Yangtze River Delta, high dividends, low valuations and good price-performance ratio.

At present, the integration of the Yangtze River Delta has risen to the national strategy, and the progress has gradually accelerated. As a construction leader in the Yangtze River Delta, the company’s efforts have significantly benefited.

The company’s dividend rate in 2018 was 43%, and the current dividend increased by 4.


The company’s 14-18 year dividend payout average is above 40%, and the distribution rate is at the forefront of the sector. High dividend payouts and low valuations have considerable costs.

Investment suggestion: Due to the intensification of capital market fluctuations, we will not consider the impact of changes in accounting standards on the fair value of financial instruments. We predict that the company’s net profit attributable to mothers will be 33 in 2019-2021.



10,000 yuan, a year-on-year increase of 21% / 15% / 11%, the corresponding EPS is 0.



48 yuan, the current sustainable corresponding PE is 8 respectively.



0x, maintain “Buy” rating.

Risk reminder: real estate budget risk, project construction progress is not up to expectations, policy progress is not up to expectations, and gross profit margin rises.