Securities code: Chongqing Sanfeng Environment Group Corp.Ltd(601827) securities abbreviation: Chongqing Sanfeng Environment Group Corp.Ltd(601827) Announcement No.: 2022013 Chongqing Sanfeng Environment Group Corp.Ltd(601827)
Announcement on the investigation of reception institutions
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.
Chongqing Sanfeng Environment Group Corp.Ltd(601827) (hereinafter referred to as “the company”) received the institutional research through teleconference on March 15, 2022. Now the situation is announced as follows:
1、 Investigation
Time: 18:00-18:40, March 15, 2022
Research method: teleconference communication
Name of research institution (in no order): Gf Securities Co.Ltd(000776) , Guotai Junan Securities Co.Ltd(601211) securities, Zhonggeng fund, Jingshun Great Wall Fund, South Fund, Fuguo fund, GF fund, Huachen future fund, Huatai Bairui fund and China Merchants Fund
Receptionists of the company: Si Jingzhong, deputy general manager, Guo Jian, chief financial officer, Qian Jing, secretary and deputy general manager of the board of directors, Liu Yan, director of the office of the board of directors, song Jianbo, deputy director of strategic planning department, and Zhu Yong, representative of securities affairs
2、 Summary of the main questions exchanged and the company’s reply
1. How many waste incineration power generation projects can be included in the list of renewable energy subsidies in 2022? What are the procedures and preconditions for entering the list
A: entering the list of renewable energy subsidies requires relevant application and administrative examination and approval procedures. Renewable energy power generation projects that meet the planning requirements, are constructed legally and in compliance, and there are no violations and administrative penalties can apply. At present, the application of various projects of the company is progressing smoothly. Among the newly completed projects put into operation in 2021, one project has entered the list publicity stage, and the remaining projects put into commercial operation in 2021 are in the process of review.
2. According to the work plan for the construction of biomass power generation projects in 2021, all subsequent projects should be “bidding on the Internet”. Has the specific policy of Competitive Allocation been implemented? In addition, does the company think that competitive allocation can maintain the reasonable profitability of the project
A: in October last year, the company participated in the competitive allocation project quotation organized by relevant government departments. Up to now, the bidding results and relevant supporting policies have not been officially issued. Under the industry trend of declining subsidies and bidding for Internet access, the quotation of waste disposal fee has increased to a certain extent through the bidding of waste incineration projects in recent one year. In addition to the corresponding adjustment of waste disposal fee, the company also does a good job in fine management, quality and efficiency improvement to further promote healthy development.
3. Does the company expect the implementation of CCER policy for waste incineration power generation? What is the expected carbon emission reduction equivalent per ton of waste incineration
A: at present, the national policy of China’s waste incineration power generation project participating in China’s carbon emission trading through CCER mechanism has not been promulgated. However, some places have begun to explore and practice. For example, Chongqing, where the company is registered, has begun to pilot the value realization mechanism of “carbon Huitong” ecological products. The company is also actively exploring. The emission reduction equivalent of waste incineration power generation project is related to its accounting methodology and the specific boundary conditions of the project. It is affected by many factors, and it is difficult to accurately predict for the time being when the policy is not clear.
4. Does the company’s EPC business income come from internal projects undertaken? What is the proportion of internal and external projects in the equipment sales business income
A: the company’s EPC revenue over the years varies in internal and external composition according to the EPC contract being executed in that year. In addition, the equipment sales revenue recognized in the consolidated statements of the company is generated from external sales, and there is no internal equipment sales revenue.
5. About how many of the projects invested by the company have not been included in the list of renewable energy subsidies A: among the waste incineration projects with a total capacity of 55800 tons / day invested by the company, more than 30000 tons / day have been included in the list of renewable energy subsidies. The remaining projects, except those requiring competitive allocation, can apply to enter the list of renewable energy subsidies on the premise that the current policy remains unchanged.
6. What is the future development direction of the company? Where is the expected future growth point? A: the company has always adhered to the principle of steady operation. At present, all projects under construction, operation projects and business segments operate stably and well. In 2021, the company’s operating revenue is expected to be 5.87 billion yuan, with a year-on-year increase of 19.16%, and the net profit attributable to the parent company is expected to be about 1.24 billion yuan, with a year-on-year increase of more than 70%. Excluding the impact of one-time recognized renewable energy subsidy income, the company’s performance still achieved steady and good growth. In the future, the company will continue to cultivate the field of waste incineration power generation with the three peak spirit of “tenacity, persistence, professionalism and focus”. Continue to strengthen technology research and development and scientific and technological research in the main business and upstream and downstream fields, strive to maintain the two core advantages of technology and operation, and provide customers with more advanced and efficient technologies, products and services. At the same time, we will spare no efforts to develop Chinese and overseas markets and continue to expand the market share of core equipment. In combination with new market opportunities and based on the field of waste incineration, implement vertical and horizontal industrial chain extension, and vertically expand upstream environmental sanitation businesses such as waste classification, cleaning and transportation, and downstream businesses such as waste leachate and fly ash disposal. Make use of the advantages of collaborative disposal to realize the collaborative disposal of domestic waste, industrial solid waste, kitchen (kitchen waste) waste, sludge and other waste horizontally, and build an environmental protection industrial park project. In addition, give full play to the company’s operational advantages and actively and prudently plan the M & A of upstream and downstream industrial chains as an important means to promote growth. By constantly expanding the field of solid waste treatment business, we are committed to becoming a first-class solution provider of urban solid waste treatment system in China and emerging countries and a world-leading well-known public company in the solid waste industry.
7. At present, how many projects of the company adopt medium temperature and sub high pressure process? Will all stock projects of subsequent companies adopt this process? What is the effect of this process on the improvement of project profitability
A: the new project designed and constructed by the company after 2019 adopts medium temperature and sub high pressure process technology to improve the thermal efficiency of the waste incineration power plant and the profitability of the project. In addition, the follow-up company will also adopt new technologies and processes to improve the thermal efficiency of waste incineration power plant and reduce the operation cost. For example, for the first batch of waste incineration power generation BOT projects put into operation, the company has carried out upgrading and transformation, which has effectively improved the operation efficiency of the project and ensured the continuous and stable operation of the project and generated reasonable benefits.
It is hereby announced.
Chongqing Sanfeng Environment Group Corp.Ltd(601827) board of directors March 16, 2022
