\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 330 Dynagreen Environmental Protection Group Co.Ltd(601330) )
Key investment points
Event: in 2021, the company achieved a revenue of 5.057 billion yuan, an increase of 122.03% at the same time; The net profit attributable to the parent company was 698 million yuan, an increase of 38.62% at the same time; The weighted average roe decreased by 2.74 PCT to 11.06%.
In 2021, the company’s return to parent increased by 38.62% to 698 million yuan, and the performance of solid waste operation sector increased steadily. In 2021, the company’s revenue increased by 122.03% to RMB 5.057 billion, mainly due to the increase of operation projects and capacity climbing, and the newly recognized construction income; The return to parent increased by 38.62% to 698 million yuan, which was affected by the asset impairment loss of 184 million yuan accrued by Ninghe straw project; The gross profit margin decreased by 23.27pct to 34.24% and the net profit margin attributable to the parent decreased by 8.30pct to 13.80%, mainly because the gross profit margin and net profit margin of construction were significantly lower than those of operating business. 1) Solid waste operation: the revenue was 2.619 billion yuan, an increase of 21.54%, accounting for 51.79% of the total revenue, the gross profit margin was 59.29%, a decrease of 0.86pct, and the performance of the operation sector improved steadily. 2) Straw power generation: the revenue was 10 million yuan, down 91.47% and the gross profit margin was – 98.45%, mainly due to the shutdown of Ninghe straw project since February. 3) BOT project construction: the recognized construction income is 2.427 billion yuan, accounting for 48.00% of the total revenue and 7.79% of the gross profit margin.
In 2021, the production capacity put into operation will increase by 7500 tons / day to 34000 tons / day, and the online capacity of tons will increase by 3.97% to 316 degrees / ton. From the perspective of operation capacity, in 2021, the company added 7500 tons / day of operation capacity, and achieved more than 6000 tons of new capacity for three consecutive years. By the end of 2021, the company’s waste incineration operation, construction in progress and preparation capacity were 34000 tons / day, 4800 tons / day and 16000 tons / day respectively, and the proportion of construction in progress and preparation / built was 61%. The projects in hand can ensure high growth in the future. From the operating data, 105376 million tons of domestic waste will be treated in 2021, an increase of 17.43% at the same time; The on grid power increased by 22.10% to 3.329 billion kwh, and the ton on grid increased by 3.97% to 316 kwh / ton, the best level in history.
Improve management efficiency & reduce debts and fees, and the expense rate decreased by 14.43pct to 12.58% during the same period. In 2021, the company’s management, R & D and financial expense ratio decreased by 3.49pct, 0.19pct and 10.74pct to 3.59%, 0.14% and 8.85% respectively. The decrease of financial expense ratio is mainly due to the decrease of debt ratio after fixed increase, which saves financial expenses.
The net operating cash flow increased significantly to RMB 12.35 billion. It is mainly due to the increase of operating income, the improvement of cash collection and the reduction of fuel procurement due to the shutdown of Ninghe straw project since February.
Solid waste operation business grew steadily, reducing debt and increasing profits & both volume and efficiency. From 2015 to 2021, the company’s waste incineration operation capacity increased by 34%. By the end of 2021, the capacity in hand was 55000 tons / day, and the capacity put into operation, under construction and preparation reached 34200 tons / day, 48 tons / day and 16000 tons / day respectively. The proportion of preparation / construction in progress was 61%. The company’s projects are concentrated in East and South China, with significant location advantages. The net interest rate of the company increased by 6.42pct to 33.28% in 2021q1-3, mainly due to 1) fixed increase and reduction of debt: after the fixed increase in 2020, the debt ratio decreased to 67%, and the financial expense ratio decreased by 10.74pct to 8.85% in 2021. 2) Project efficiency improvement: high-quality projects drive the increase of average ton production, which will increase by 13% to 369 degrees / ton in 2020 and 383 degrees / ton in 2021.
Profit forecast and investment rating: according to the new construction of the company’s projects in 2021 and the latest construction progress, we will reduce the net profit attributable to the parent company from 10.16/12.45 yuan to 9551103 million yuan in 20222023, with a year-on-year increase of 36.82% / 15.49%. It is estimated that the net profit attributable to the parent company in 2024 will be 1.238 billion yuan, with a year-on-year increase of 12.27%, corresponding to EPS of 0.69, 0.79 and 0.89 yuan in 20222024. The current market value corresponds to PE of 13, 11 and 10 times in 20222024, Maintain the “buy” rating.
Risk tip: the project progress is not as expected, policy risk, financial risk and intensified industry competition.
