\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 15 Eit Environmental Development Group Co.Ltd(300815) )
Event: the company released its annual report for 2021, and achieved an operating revenue of 4.834 billion yuan in 2021, with a year-on-year increase of 12.01%; The net profit attributable to the parent company was 473 million yuan, a year-on-year decrease of 25.12%. From 2019 to 2021, the gross profit margin was 21.6%, 29.7% and 22.7% respectively. In 2021, the covid-19 epidemic policy preference was completely cancelled, and the profitability of the company returned to the normal level.
Under the background of subsidy cancellation, the scale of the two major businesses grew steadily, and municipal sanitation was the main performance driving force. The two business segments of the company grew steadily. The total amount of newly signed contracts in the municipal sanitation sector was about 3.68 billion yuan. As of December 31, 2021, the total amount of contracts in hand was 36.725 billion yuan and the amount of contracts to be executed was 27.062 billion yuan; In 2021, the operating revenue was 3.759 billion yuan, with a year-on-year increase of 11.52% and a gross profit margin of 26.17%. The total amount of newly signed contracts in the property cleaning sector is about 1.344 billion yuan. As of December 31, 2021, the total amount of contracts in hand is 1.679 billion yuan and the amount of contracts to be executed is 940 million yuan; In 2021, the operating revenue was 1.071 billion yuan, with a year-on-year increase of 14.98% and a gross profit margin of 10.27%.
The company has a wide business coverage and won a number of high-quality projects relying on the advantage of city share. The municipal sanitation sector covers 26 provincial administrative regions in China, and won the bid for many urban public service projects such as the Market-oriented Urban Management Project in Bincheng District. The company provides environmental health guarantee services for international large-scale forum meetings such as Boao Forum for Asia, the first China Consumer Expo and China Arab Expo, and helps the local government realize the market-oriented reform of environmental sanitation through various modes such as PPP, franchise, government trusteeship and mixed reform of state-owned assets. The property cleaning sector continued to maintain long-term and stable cooperative relations with Guangzhou Metro and Shenzhen Metro, and won the bid for many high-end projects such as Guangzhou Guangzhou Baiyun International Airport Company Limited(600004) cleaning project.
Acquire Shenzhen baotaixin, lay out “forestry carbon sink”, promote informatization + intelligent construction and enhance competitive advantage. The company acquired Shenzhen baotaixin, whose main business is related to waste classification, and is mainly engaged in waste reduction and classification. In July 2021, the company established the carbon asset operation and investment division, which mainly focuses on forestry carbon sequestration and assists local governments in jointly developing and monitoring local forestry carbon sequestration resources. The company continued to increase investment in informatization + intelligent construction, and gradually completed a set of three-dimensional, diversified and open industrial informatization product matrix.
Profit forecast, valuation and rating: under the catalysis of the “double carbon” policy, the application of waste classification, recycling and new energy sanitation equipment will develop rapidly. The company has been deeply engaged in the industry for many years and has accumulated a large number of high-quality customers with long-term cooperation. It is expected that the scale of the company’s property cleaning business will benefit from the optimization of industry structure and worry free orders in 22 years; Through extensive distribution of new businesses and improvement of management ability, we can withstand the external environmental pressure of the epidemic and penetrate the cycle. In view of the cancellation of the preferential policies for the epidemic and the company’s order taking strength is slightly lower than expected, we lowered the company’s net profit of 29% / 26% to 573 / 665 million yuan in 202223, increased the predicted net profit of 750 million yuan in 2024, and the current share price is 12 times that of PE in 2022. The company maintains a leading position in the field of environmental sanitation, has certain brand and business advantages, and maintains the “buy” rating.
Risk warning: the industry support policy is declining; Changes in preferential tax policies; On grid electricity price and subsidy change risk, etc.
