\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 475 Wuxi Huaguang Environment & Energy Group Co.Ltd(600475) )
Deeply cultivate the field of environmental protection + energy, and face the steady development of carbon neutrality Wuxi Huaguang Environment & Energy Group Co.Ltd(600475) was established in 1958, formerly known as Wuxi Boiler Factory. It was first listed on the main board of Shanghai Stock Exchange in 2003 and completed major restructuring in 2017. The company focuses on the field of environmental protection + energy, and its main business includes environmental protection equipment, local thermal power operation services, municipal environmental protection projects and services, energy-saving and efficient power generation equipment, power station projects and services and environmental protection operation services. In 2021, all businesses of the company will recover in an all-round way, and the revenue and performance will achieve great growth. In the first three quarters of 2021, the company’s operating revenue was 5.189 billion yuan, a year-on-year increase of 20.12%, and the net profit attributable to the parent company was 508 million yuan, a year-on-year increase of 20.14%.
The environmental protection comprehensive service business is developing well, and the company has outstanding advantages in comprehensive service ability. In May 2021, the national development and Reform Commission and the Ministry of housing and urban rural development issued the development plan for urban domestic waste classification and treatment facilities in the 14th five year plan, which put forward objectives and requirements for the resource utilization rate of urban domestic waste, waste classification, collection and transportation and waste incineration, so as to promote the development of solid waste disposal industry. In addition, according to the national 14th five year plan, during the 14th Five Year Plan period, the harmless treatment rate of urban sludge should reach more than 90%, the disposal level of built towns in the Yangtze River economic belt, the Yellow River Basin and Beijing Tianjin Hebei region should be significantly improved, and the scale of new harmless treatment facilities should not be less than 20000 tons of wet sludge / day. Under the catalysis of policies, the market demand for solid waste disposal continues to release. The company has strong solid waste industrial chain collaborative development and disposal capacity, and can conduct comprehensive collaborative disposal of domestic waste, kitchen waste, sludge and algae sludge; At the same time, the company has established the whole industrial chain platform of waste incineration power generation, and has the ability to invest, build and operate domestic waste power generation projects. In the field of sludge disposal, the company’s technical strength and disposal scale are in the forefront of the industry. Overall, the company has strong comprehensive competitiveness in the field of solid waste disposal, and the development of comprehensive environmental protection service business is expected to maintain a steady trend in the future.
The energy equipment and service business benefited from the promotion of the “double carbon” policy, and the company developed voltage regulators. Under the “double carbon” policy goal, the green and low-carbon transformation trend of the power industry is obvious, and the market demand for the design and manufacture of energy-saving and efficient power generation equipment, power station engineering and services of the company continues to grow. At the same time, due to the system integration transformation of the power station industry, the company has the ability to integrate design, construction and operation and maintenance, and has a strong competitive advantage in the market. In addition, energy conservation and efficiency improvement in the industrial field is very important, and the utilization of waste heat resources has become an important starting point. Iron and steel, metallurgy, chemical industry, cement, petrochemical and other industries are rich in waste heat resources, but the utilization rate of waste heat resources by existing equipment is low, and the progress of energy-saving transformation of boilers will be accelerated. The promotion of the “double carbon” policy forced the accelerated release of industrial energy-saving market demand, which was beneficial to the company’s energy-saving and environmental protection boiler equipment business. At the same time, the company actively developed intelligent operation, improved the efficiency of thermal power business, refined management and control, and achieved remarkable results in cost reduction and efficiency increase.
Acquire the equity of China established Guolian and actively layout the development of new energy. In December 2021, the company purchased 58.25% of the equity of China Guolian from Guolian industry by paying cash, and the equity purchase price was 301 million yuan. CSCEC Guolian is mainly engaged in the investment and operation and maintenance of photovoltaic projects, and has sufficient project experience and technical accumulation in the field of photovoltaic investment and operation. Under the background of the current “double carbon” target policy, the installed capacity of photovoltaic is expected to continue to grow, Wuxi Huaguang Environment & Energy Group Co.Ltd(600475) is expected to rely on CSCEC Guolian as the carrier to vigorously develop the EPC and operation business of photovoltaic power plants and bring new performance increment to the company.
Investment suggestion: the company has been deeply engaged in the field of environmental protection + energy, accumulated rich experience and technical advantages, developed in coordination with various businesses, and formed an integrated comprehensive service system. At present, the company has actively completed the extension and transformation of its business. Under the background of double carbon, the favorable policies in the field of environmental protection and energy are constantly released. It is expected that the development prospect of the company will be better during the 14th Five Year Plan period. It is estimated that the operating revenue of the company from 2021 to 2023 will be 9.538 billion yuan, 11.525 billion yuan and 14.082 billion yuan respectively, with a year-on-year increase of 24.81%, 20.84% and 22.19% respectively, and the net profit attributable to the parent company will be 766 million yuan, 941 million yuan and 1.116 billion yuan respectively, with a year-on-year increase of 26.91%, 22.83% and 18.69% respectively; The corresponding EPS are 1.05, 1.29 and 1.54 respectively, and PE are 9.40, 7.65 and 6.45 times respectively. For the first time, give a “buy” rating.
Risk warning: the project progress is not as expected; Intensified market competition; The public data used in the research report may have the risk of information lag or untimely update.
