\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 827 Chongqing Sanfeng Environment Group Corp.Ltd(601827) )
Event overview: the company released its 2021 annual report, and achieved an operating revenue of 5.874 billion yuan during the reporting period, with a year-on-year increase of 19.2%; The net profit attributable to shareholders of listed companies was 1.238 billion yuan, a year-on-year increase of 71.8%; Non net profit attributable to shareholders of listed companies was RMB 1.223 billion, with a year-on-year increase of 76.4%. The company plans to distribute a cash dividend of RMB 0.222 per share to all shareholders.
The scale and efficiency are leading in the industry, and the national subsidy has confirmed the thickening performance: in 2021, the company added 10450 tons / day of operation capacity, 34 waste incineration power generation projects have been put into operation (including joint-stock projects), and the design treatment scale is 41500 tons / day. In 2021, the holding projects completed a total waste treatment capacity of 107439 million tons and achieved an on grid power of 3.68 billion kwh, with a year-on-year increase of 26.3% and 29.1% respectively. The on grid power of unit garbage reaches 343 kwh, and the power consumption rate of the plant is about 12.3%. Fine management improves the operation efficiency. During the reporting period, several projects of the company were included in the list of renewable energy power generation subsidy projects, and the subsidy income of 399 million yuan was confirmed at one time, which thickened the annual performance.
The project reserves are abundant, and there is room for the growth of domestic alternative incinerator equipment: in 2021, the company won the bid for three new waste incineration power generation BOT projects, with a new processing capacity of 1700 tons / day, 17 waste incineration power generation projects under construction and under preparation (including equity participation), with a total design processing scale of 14500 tons / day. The project reserves are abundant, ensuring the continuous growth of subsequent performance. In March 2021, the company signed Beijing Anding 5100 (6) × 850) t / D incinerator and auxiliary equipment project. This super large project uses domestic incinerators to replace imported products, which has an important industry demonstration effect. Under the trend of domestic substitution in the future, the company’s incinerator business may gain greater market share by virtue of its industry-leading position.
The implementation of renewable energy power generation subsidies is expected to accelerate: the Ministry of Finance issued the budget table of central government fund expenditure in 2021, proposing that the “central level expenditure” in “other government fund expenditure” should increase from 92.8 billion yuan in 2021 to 452.8 billion yuan. The policy may speed up the implementation of renewable energy power generation subsidies, improve the cash flow of waste incineration power generation industry and ensure the high-quality and sustainable development of the industry.
Investment suggestion: according to the disclosure of the annual report, Qijiang, Xiushan, Xichang phase II, Wulong and Hechuan projects controlled by the company and Anyang and Fushun projects with equity participation have entered the trial operation stage. It is expected that the company’s performance will continue to grow with the acceleration of project production and national subsidy application and approval. We maintain the previous profit forecast of the company. It is estimated that the company’s EPS in 22 / 23 years will be 0.75/0.85 yuan respectively, the new 24-year EPS forecast value will be 0.89 yuan, and the corresponding closing price PE on March 30, 2022 will be 10.3/9.1/8.7 times respectively. The company will be given 12 times PE in 2022, corresponding to the target price of 9.00 yuan, maintaining the rating of “prudent recommendation” of the company.
Risk tips: 1) the progress of project construction and operation is less than expected; 2) The risk of industry slowdown; 3) The risk of slowing down the speed of inclusion in the national supplementary catalogue; 4) The development of large solid waste business is less than the expected risk.
