\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 330 Dynagreen Environmental Protection Group Co.Ltd(601330) )
Key investment points
Event: the company disclosed its 2021 annual report. In 2021, the company realized an operating revenue of 5.057 billion yuan, a year-on-year increase of 122.03%; The net profit attributable to the parent company was 698 million yuan, a year-on-year increase of 38.62%.
Comments:
Solid waste treatment revenue maintained rapid growth. In 2021, the company achieved a revenue of 5.057 billion yuan, a year-on-year increase of 122.03%. In terms of business segments, the revenue from solid waste treatment was 2.619 billion yuan, with a year-on-year increase of 21.54%, mainly due to the increase of operating projects and the improvement of capacity utilization of some operating projects; The construction income of BOT project was 2.427 billion yuan. The company implemented the interpretation of accounting standards for Business Enterprises No. 14 and recognized the construction income of BOT project for the first time, resulting in a significant increase in revenue. In 2021, the company realized a net profit attributable to the parent company of 698 million yuan, with a year-on-year increase of 38.62%. In a single quarter, 2021q4 achieved a revenue of 3.111 billion yuan, a year-on-year increase of 395.02%; The net profit attributable to the parent company was 84 million yuan, a year-on-year increase of 11.36%.
BOT project construction business lowers the overall gross profit margin of the company. In 2021, the company’s gross profit margin was 34.24%, a year-on-year decrease of 23.27 percentage points. In terms of business segments, the gross profit margin of solid waste treatment business was 59.29%, a year-on-year decrease of 0.86 percentage points, and the average value in recent three years was 59.19%, with relatively stable profitability; The gross profit margin of BOT project construction business was 7.79%, which lowered the overall gross profit margin of the company. In 2021, the company’s net interest rate was 14.67%, a year-on-year decrease of 8.53 percentage points. In a single quarter, the gross profit margin of 2021q4 company was 17.58%, a year-on-year decrease of 38.13 percentage points; The net interest rate was 3.03%, a year-on-year decrease of 10.58 percentage points.
The construction of the project continues to advance, and the production capacity is expected to be released gradually. In 2021, the company’s project construction continued to advance. Six new projects and three phase II projects were completed and put into operation, with an additional capacity of 7500 tons / day and more than 6000 tons / day for three consecutive years. As of December 31, 2021, the company has 31 operating projects in the field of domestic waste incineration power generation, with a waste treatment capacity of 34000 tons / day, 5 projects under construction and 7 projects under preparation. The production capacity is expected to be released gradually.
The company actively carries out new businesses such as food waste treatment and heating, which is expected to expand its source of income. In 2021, the company newly obtained Shantou Chaoyang kitchen waste treatment project and Tianjin Ninghe kitchen waste treatment project. By the end of 2021, the company had obtained 8 food waste treatment projects, realizing business collaboration with domestic waste incineration power generation projects. In addition, the company’s Pingyang project, Rushan project and Jiamusi project have successfully expanded heating business. By the end of 2021, the company has carried out five waste incineration power generation projects in heating business, which is expected to expand the source of income.
Investment advice: maintain a prudent recommendation rating. It is estimated that the company’s EPS from 2022 to 2023 will be 0.71 yuan and 0.76 yuan respectively, and the corresponding PE will be 12 times and 12 times respectively, maintaining a prudent recommended rating.
Risk warning: policy promotion is not as expected; Macroeconomic development is less than expected; The construction progress of waste incineration power generation project is less than expected.
