What company is Kao Convertible Bonds?

The main stock Kao Co., Ltd. is a landscaping engineering construction company. All the shares held by the actual controller are pledged. In 2017, the goodwill formed due to acquisitions has been impaired for two consecutive years, and the subsequent risks are still there. There is a risk of pending litigation. The interest-bearing debt ratio is 48.74%; the total principal and interest of the convertible bonds at maturity is 125.3. The current conversion value is 107.2, and the premium rate is -6.72%. The reasonable listing price is estimated to be around 122 yuan, and the convertible bonds on the Shanghai stock market have reached 120 yuan, and trading has been suspended for half an hour.

1. Fundamentals of Kao’s stock

1. The company is mainly engaged in engineering design and construction business in the fields of municipal garden landscapes, eco-tourism landscapes, road greening, real estate landscapes, etc., and also has a small amount of Concurrently engaged in the planting business of seedlings. In addition, the company acquired Zhongwei International in September 2017 to increase its engineering design business, and acquired a 60% stake in Zhengzhou Water Affairs in October 2017, adding water conservancy and hydropower engineering and prestressed pipe businesses. In terms of revenue contribution, the company's engineering construction revenue accounted for 88% in 2019, of which municipal gardens accounted for the most, accounting for 59% of the total revenue. Eco-tourism landscape and water conservancy projects accounted for 16% and 10% of the company's total revenue in 2019 respectively. %, design revenue accounts for 9.9%.

2. In terms of regions, the company's revenue mainly comes from Central China, accounting for 75% in 2019, and has increased rapidly in the past three years. At the same time, revenue in East China, North China, and Northwest China continues to decrease, indicating a lack of sufficient New projects have continued, and revenue in the southwest region has increased since 2018, accounting for 10.3% in 2019.

3. In terms of credit, as of the end of 2019, the company had a remaining credit line of 772 million yuan from various banks, most of which were credit lines that did not require mortgage, accounting for the total operating and investment activities in 2019. 44% of the cash outflow. In addition, there are still 300 million yuan in receivables within one year at the end of 2019, most of which are project receivables. In terms of operational efficiency, the company's receivables and inventory turnover rates are relatively high among its peers, and are similar to Lingnan Co., Ltd. Since 2020, the company has won the bid for two Liaocheng municipal road construction projects, with a total bid amount of 540 million yuan and a construction period of 12 months. However, each road is settled separately, so it should be able to contribute a certain amount of revenue during the year.