Research and Development Co., Ltd. (603458): Benefit from the short-term performance of the Southwest Province to usher in steady growth

Research and Development Co., Ltd. (603458): Benefit from the short-term performance of the Southwest Province to usher in steady growth

Prospecting shares: Southwest engineering design leaders are heading for national expansion.

The exploration joint stock business is mainly located in Guizhou Province and surrounding provinces. It mainly provides full-process professional technical services for highway, municipal, construction, and water transportation industries. The core business is engineering consulting and engineering contracting for the highway industry.

In 2018, the company realized operating income21.

52 ppm, an increase of 11 years.

66%; net profit attributable to mothers3.

53 ppm, a ten-year increase of 7.


The company’s largest shareholder is Zhang Lin, with a stake of 9.


Highway business is the mainstay, and regional expansion continues.

The company has rich experience and obvious advantages in mountainous highways, mountainous large-scale railways, karst areas and coal-bearing strata tunnels.

The revenue from highway business accounts for more than 75%; the gross profit margin of the highway and municipal industries has been stable and stable, and the gross profit margin of the construction and water operation industries has penetrated.

The layout of channels outside the province has continued to advance, and regional expansion has contributed to the growth of performance; the market share of surveying shares in Yunnan has reached 1/5, and future performance is worth looking forward to; the rapid growth of investment in transportation in Guangxi in 2019 is expected to fully benefit surveying shares.

A large number of orders ensure the growth of performance, and outsourcing mergers and acquisitions and equity incentives have consolidated the main business.

As of the end of 2018, the company had about $ 4.2 billion in consulting contracts in hand, which was 2% of consulting revenue in 2018.

46 times, the surplus orders can ensure the rapid growth of future performance; and the adverse effects of “de-leveraging” on the company have subsided. Against the background of “infrastructure repair shortcomings” and the warming up of infrastructure investment, overlapping companies have a lot of overlapping orders on handIn the future, the company’s revenue is expected to usher in recoverable growth.

In 2018, while the company promoted outbound mergers and acquisitions and equity incentives, strengthened the strength of the original main business, and actively explored new business areas and markets.

Financial analysis: profitability budget, return on assets and liabilities.

The company’s gross profit margin in 2018 was 39.

7%, with a net interest rate of 16.

4%, which is higher than the industry leader, and is located in the middle and upper reaches of the industry; the total assets and liabilities of the surveyed and established shares in 201843.

9%, which is lower than the 南京夜网 level of Suzhou Jiaotong Group and China Construction Group. It is at the low and medium level in the industry; the rate of sales of exploration shares is at the lowest level in the industry, and the management fee rate is in the middle of the industry.

Earnings forecasts and estimates: We maintain our earnings forecasts for the company, with an EPS of 3 in 2019-2021.

72 yuan, 4.

72 yuan, 6.

15 yuan, the PE corresponding to the closing price on May 10 were 9 respectively.

1x, 7.

2 times, 5.

5 times, maintain the rating of “prudent increase”.

Risk reminder: Macroeconomic downside risks, orders falling on hand are less than expected, business development outside the province is less than expected, construction project progress is slow, and gross margin continues to decline