Zhejiang Heda Technology Co.Ltd(688296) (688296)
Main points:
Zhejiang Heda Technology Co.Ltd(688296) is an excellent information and intelligent service provider in China's water industry. It started from the information system of water production and pipe network, and gradually developed into a multi-level intelligent service platform. The company's water industry is the foundation of public utilities, and the water pipe network is the artery of the city, supporting the urban modernization and the vigorous development of economy and society. From the perspective of industrial chain, the water industry includes raw water intake, tap water production, water supply pipeline, secondary water supply, drainage, sewage treatment and reclaimed water for end users. Zhejiang Heda Technology Co.Ltd(688296) he has been engaged in information construction in the field of water affairs for 20 years and has a deep understanding of water supply pipe network. In this report, we will interpret the changes of water industry demand and relevant policies from the perspective of time, and analyze Zhejiang Heda Technology Co.Ltd(688296) future investment opportunities in combination with Zhejiang Heda Technology Co.Ltd(688296) years of service experience in the industry and continuous iterative upgrading products.
Short term: supply and demand and policies have brought about significant marginal changes, and the demand for water information construction is exploding. 1) in terms of demand, the market-oriented reform of the water supply industry has accelerated, showing three characteristics: diversified subjects, transformation of business mechanism and regional operation. We found that the number of newly established water groups has increased sharply in recent three years, and 948 new water groups will be established in 2020, a record high, The transformation of water enterprises from the government to an independent market-oriented group has a strong trend of certainty. After the water group with a large amount of data is separated from the support of the government, it is urgent to reduce costs and increase efficiency by means of informatization, so it gives birth to a large number of water system construction needs. 2) In terms of policies, the measures for the administration of urban water supply prices and the measures for the supervision and examination of urban water supply pricing costs were issued in 2021, making the calculation method of water supply prices more market-oriented. The new method introduces the leakage rate index as the influencing factor of the average water supply price, and stipulates that the water enterprises shall bear the cost for the part with the leakage rate exceeding 10%. In 2020, the average leakage rate of urban public water supply in China will be 13.39%. In some regions, such as the northeast, the leakage rate will exceed 20%, far exceeding the 10% cost line. There is a large space and high urgency to reduce leakage. 3) In terms of supply, Zhejiang Heda Technology Co.Ltd(688296) starting from the pipe network, has rich practical experience and benchmarking cases in the leakage reduction management business. It has maintained close cooperation with many major customers and helped the benchmarking customer Shaoxing water to reduce the leakage rate from more than 20% to 3.7%, which has remained below 5% for 10 consecutive years, reaching the international advanced level. We believe that Heda is expected to replicate and promote the standardized leakage management system to the whole country by virtue of its technology and reputation, so as to meet the explosive growth demand for leakage reduction information system.
Medium and long term: the goal of building a water-saving society is established, and Heda will usher in nearly 100 billion smart water market. 1) the national "14th five year plan" for building a water-saving society puts forward clear goals in terms of intelligent monitoring of pipe network leakage, digitization of pipe network operation and maintenance, and resource utilization of sewage, including drainage, water The whole industrial chain of smart water, such as sewage management and agricultural and drinking water transformation, is expected to break out in the medium and long term under the promotion of policies. We believe that the industry knowhow and software and hardware systems involved in drainage dispatching, sewage monitoring and rural water supply are highly similar to those in water supply. The Zhejiang Heda Technology Co.Ltd(688296) core technology has high reusability. It has realized the layout expansion from water supply informatization to intelligent drainage, water conservancy and agricultural drinking water. It is expected to open up all links of the whole water industry chain and usher in the blue ocean market of intelligent water in the medium and long term. 2) By analyzing the bidding document of the pilot project of intelligent water supply construction in Shaoxing City, we calculate that the value of the comprehensive water supply system in a county-level area is about 15.54 million yuan, and an average county-level administrative region needs 1.37 sets of systems. Therefore, it is estimated that the market space of the water supply link of the national smart water bill is 59.9 billion yuan. Considering that smart water also includes software and hardware systems and solutions such as smart water intake, drainage and sewage treatment, the whole smart water industry chain where Zhejiang Heda Technology Co.Ltd(688296) will have nearly 100 billion market space in the future.
Investment advice
Zhejiang Heda Technology Co.Ltd(688296) as an information leading enterprise deeply engaged in the water industry for more than 20 years, it has rich industry experience, significant technical advantages and strong customer stickiness α Properties. At the same time, affected by the marketization of water enterprises and the policy of water price increase in the short term, the demand of water enterprises for informatization cost reduction and efficiency increase has increased; In the medium and long term, the national goal of building a water-saving society will promote downstream enterprises to layout the information system of the whole water industry chain and realize the intelligent upgrading of water affairs. By virtue of their own strength α， Superimpose the high demand of informatization and intelligent upgrading of water industry β， Zhejiang Heda Technology Co.Ltd(688296) is expected to usher in high performance growth. We expect Zhejiang Heda Technology Co.Ltd(688296) 2021-2023 to achieve revenue of 547 / 832 / 1211 million yuan respectively, with a year-on-year increase of 50.6% / 52.1% / 45.5%; The net profit attributable to the parent company was RMB 111 / 175 / 256 million, with a year-on-year increase of 46.5% / 57.7% / 46.6%. It was covered for the first time and given a "buy" rating.
Risk statement
1) The implementation of water supply price policy is less than expected;
2) The construction of water-saving society and the transformation and upgrading of pipe network were not as expected;
3) The recovery of accounts receivable was less than expected.
