Huaxi Securities: Gave Roman shares a buy rating with a target price of 31.5 yuan

2021-10-26Huaxi Securities Co., Ltd. Yu Hang conducted a study on Roman shares and released a research report "Transformation of the whole life cycle service provider, development presses the acceleration button", this report gives a buy rating to Roman shares, believing that its target price is 31.50 yuan, the current stock price is 23.61 yuan, and the expected increase is 33.42%.

ROMAN SHARES (605289)

Landscape lighting head enterprise, the advantages are obvious. The company has been deeply engaged in landscape lighting for more than 20 years, is one of the few enterprises in the industry with "double A qualification", and can provide design, engineering construction and post-operation and maintenance integration services, has undertaken a number of benchmark landscape projects in Shanghai, won a number of important awards in the industry, and is currently China's leading overall solution provider of landscape lighting, with obvious advantages in creative design, technology research and development and comprehensive service capabilities.

Landscape lighting: high-quality track, supply and demand relationship is good, resources to the head concentration. At present, the industry space is about 100-110 billion yuan, and because landscape lighting usually involves the image of the city, the investment amount is large and the cost of trial and error is high, and the operation and maintenance of the later stage is required after the completion of the construction, so it has the characteristics of high gross profit, high viscosity and weak cycle. With the construction of characteristic towns and the development of the night economy, the landscape lighting industry is expected to expand steadily; and due to 1) more and more cities with the help of landscape lighting to create city business cards and tourism IP, the industry is gradually culturally and creative, 2) the overall design and construction of the area is increasing, the volume of a single project is expected to rise, 3) the requirements for intelligent operation and maintenance are improved, we believe that the requirements of customers for service provider qualifications, qualifications, and credit will gradually increase, and industry resources will be concentrated to the head enterprises.

Transforming urban integrated service providers, improving competitiveness and efficiency, and pressing the acceleration button for development. While laying out the design business earlier, the company has increased its layout in big data, VR/AR and new energy-related fields in recent years, enhanced key capabilities in the operation and maintenance stage such as smart management and IP creation of cultural tourism scenes, further improved the service closed loop, and built a city life cycle service provider; in the future, the ability to obtain large orders among key customers is expected to be further enhanced, and the operational efficiency is also expected to be further improved. At the same time, the rise of scene construction and IP building capabilities is also expected to enhance the company's competitiveness in the cultural tourism and commercial sectors, and enhance the company's C-end layout.

Investment advice. It is estimated that from 2021 to 2023, the company's revenue will be 7.38/9.28/1.220 billion yuan, net profit attributable to the mother of 1.40/1.82/242 million yuan, EPS 1.62/2.10/2.79 yuan, corresponding to the closing price of 23.50 yuan on October 25, PE of 14.50/11.21/8.43x, respectively. The company was given a target price of $31.50 based on the P/E valuation method, and for the first time it covered the "buy" rating.

Risk Warning

Government financial resources are less than expected, industry consolidation is weaker than expected, and systemic risks are.

The Securities Star Valuation Analysis Tool shows that the good company rating of 605289 is 2.5 stars, the good price rating is 1.5 stars, and the valuation comprehensive rating is 2 stars.