Dongzhu Ecological Environment Protection Co.Ltd(603359) (603359)
The garden industry is a leader in profits and has sufficient driving force for steady growth. In recent years, the landscape industry has continued to shuffle, and the competition pattern has changed greatly. The company continues to maintain a steady business situation. This year, q1-3 performance continues to lead the industry. At the same time, the company has high gross profit margin and net profit margin, outstanding cost rate control ability and strong overall profitability. By the end of 2021q3, the company's asset liability ratio was only 57%, which was at a low level among listed garden companies, the interest bearing liability ratio was only 3%, which was at a very low level, and the financial quality remained stable. In terms of orders, q1-3 company has signed a total of 1.6 billion yuan this year, an increase of 21% over last year. At present, the company has abundant orders on hand, and continues to obtain high-quality orders through cooperation with central enterprises and state-owned enterprises, so as to promote the continuous and steady growth of the company.
The ecological garden policy environment is excellent, and the forestry carbon sequestration blue ocean market space is broad. China has been actively responding to global climate change for a long time. This year, focusing on the goal of green and low-carbon development, China continued to introduce a series of development promotion policies in the field of ecological gardens. Among them, forestry carbon sequestration can effectively solve the rise of CO2, and the cost of CO2 removal is about 10-50 US dollars / ton, The cost of industrialized carbon capture and storage (CCS) technology is about 2-3 times, which highlights the economy of forestry carbon sink (national certified voluntary emission reduction) can be used for carbon emission deduction. Although the national development and Reform Commission suspended the application for CCER filing since 2017, with the opening of the national carbon emission trading market in July this year, the market is expected to restart CCER approval. We estimate that the market scale of forestry carbon sequestration is expected to reach 70 billion yuan in 2030. At present, it is still in the blue ocean. Considering that the current CCER trading price in China is only 20% About 1 / 10 of the EU, the value of carbon sequestration assets is expected to highlight in the future, driving the revaluation of relevant enterprises with outstanding forestry carbon sequestration development capacity and rich resource reserves.
The company has outstanding advantages in forestry carbon sequestration development: 1) channel resources, long-term focus on forestry, and maintain good cooperative relations with local governments, which is conducive to expanding forest resources that meet CCER carbon sequestration development standards, and has strong project contracting ability; 2) Professional ability. At present, the company has established Dongzhu carbon sequestration subsidiary, specializing in forestry carbon sequestration development, with a strong professional team; 3) Financial strength and good financial situation to ensure the fund demand of forestry carbon sequestration; 4) Partners, maintain good cooperation with many authoritative institutions to ensure the standardization and smoothness of subsequent carbon sequestration development and application. In the future, if the development of forestry carbon sequestration market accelerates, the company is expected to create a new growth point.
If China's forestry carbon sequestration market is opened, it is expected to create a new growth point. Since this year, the company has successively signed a strategic cooperation agreement with Shanghai Environment Group Co.Ltd(601200) energy exchange, increased the business scope of "carbon emission reduction, carbon conversion, carbon capture and carbon storage technology research and development", and signed a strategic cooperation agreement with Sichuan Changjiang Afforestation Bureau to pilot forestry carbon sequestration project, which has continued to make positive progress. The company announced that the follow-up will be in Yunnan Province, Guangxi Province Fujian Province and other provinces rich in forest resources actively develop forestry carbon sequestration projects and continue to distribute forestry carbon sequestration resources. In the future, if the development of China's forestry carbon sequestration market accelerates, the company is expected to create a new growth point.
Investment suggestion: we predict that the net profit attributable to the parent company from 2021 to 2023 will be RMB 460 / 530 / 630 million respectively, with a simultaneous increase of 20% / 16% / 18% (CAGR in 2020-2023 is 18%), EPS will be RMB 1.03/1.19/1.41 respectively, and the current share price corresponding to PE is 13 / 12 / 10 times. Considering the company's active layout of forestry carbon sink, the growth potential is prominent, and the "buy" rating is maintained.
Risk tips: industry policy risk, risk that new business development is less than expected, risk of accounts receivable, risk of tightening credit environment, etc.
