\u3000\u3000 China Tianying Inc(000035) China Tianying Inc(000035) )
Key investment points
Event: in 2021, the company achieved a revenue of 20.593 billion yuan, a decrease of 5.83% at the same time; The net profit attributable to the parent company was 729 million yuan, an increase of 11.54% at the same time; Deduct the net profit not attributable to the parent company of 728 million yuan, an increase of 15.08% at the same time.
In 2021, the return of the company to its parent company increased by 11.54% to 729 million yuan. After urbaser stripping, the gross profit margin of urban service & waste treatment rebounded. In 2021, the company's gross profit margin was 14.13%, down 0.6pct at the same time. In 2021, the company sold 100% equity of urbaser with 10.937 billion yuan, and the net profit contributed by urbaser to the company from the beginning of the year to the date of sale was 503 million yuan, accounting for 69.01% of the total net profit of the company. In terms of business, 1) urban environmental services: the revenue was 9.084 billion yuan, a decrease of 13.28% and the gross profit margin was 12.15%, an increase of 0.03pct; 2) Garbage disposal: the revenue was 5.714 billion yuan, with a decrease of 14.16% and a gross profit margin of 17.95%, with an increase of 0.82 PCT; 3) Water treatment: the revenue was 341 million yuan, with a decrease of 18.43% and a gross profit margin of 19.89%, with an increase of 0.06 PCT; 4) Industrial waste treatment: the revenue was 1.239 billion yuan, with a decrease of 3.32% and a gross profit margin of 21.32%, with an increase of 0.56 PCT; 5) Environmental protection equipment and others: the revenue was 4.215 billion yuan, an increase of 38.83% and the gross profit margin was 10.64% and a decrease of 4.55 PCT, mainly due to the construction income of 1.229 billion yuan of BOT projects confirmed in 2021 according to the new accounting standards, and the gross profit margin of construction income was low.
The sale of urbaser optimized the asset structure, with sufficient funds in hand and a rebound in profitability. After the divestiture of urbaser, the company's financial situation faced three major changes: 1) the decline of goodwill and debt ratio: at the end of 2021, the goodwill decreased from 5.6 billion yuan to 66 million yuan, the impairment risk was eliminated, and the asset liability ratio decreased by 20.72 PCT to 54.48%, leaving room for financing. 2) Abundant cash on hand: the exchange obtains cash to repay debts, reduce financial pressure, and the remaining funds are abundant for business development. 3) Profit indicators will rebound significantly.
By the end of 2021, the incineration operation capacity was 11600 tons / day, the storage space doubled, and the operation efficiency was improved & the overseas expansion was rich. 1) Incineration scale: by the end of 2021, the incineration operation (including trial operation) capacity is 115.5 million tons / day, the domestic and foreign preparation scale is about 20000 tons / day, and the proportion of preparation / construction in progress is 172%. 2) Power generation efficiency: in 2021, the on grid power per ton will increase by 11% to 262 kwh / ton, and the operation will continue to improve efficiency. 3) Market expansion: in 2021, the company jointly won the bid for the capital special zone project in Jakarta, Indonesia, with a scale of 1500 tons / day. By the end of 2021, the company's overseas production capacity was 7800 tons / day, ranking first in the industry, accounting for 25% of the production capacity in hand.
The project of plasma disposal of fly ash and medical waste was launched to accelerate the layout of new energy and respond to the dual carbon goal. The company's plasma technology is leading in the country and has the conditions for industrialization. The promotion of plasma disposal process based on technology internal drive & Policy extrapolation can be expected. By the end of 2021, the company has 7 medical waste disposal projects and 3 fly ash disposal projects. The company signed a new energy industry investment agreement with Rudong County to plan the development of new energy projects such as photovoltaic and wind power, the research and development of energy storage projects, the construction of regional energy center and Internet platform, and the construction of zero carbon infrastructure platform; Cooperate with ev to build the first 100 megawatt hour gravity energy storage project in China. The company accelerated the layout of new energy industry and seized the commanding height of zero carbon industry competition.
Profit forecast and investment rating: according to the progress of the company's projects under construction and new business expansion, we will reduce the net profit attributable to the parent company in 2022 from 798 million yuan to 726 million yuan, and maintain the net profit attributable to the parent company in 2023 at 1.005 billion yuan. It is estimated that the net profit attributable to the parent company in 2024 will be 1.193 billion yuan, with a year-on-year decrease of 0.48%, an increase of 38.52% and an increase of 18.70% from 2022 to 2024, EPS of 0.29/0.40/0.47 yuan respectively, and the current market value corresponding to PE of 18 / 13 / 11 times, Maintain the "overweight" rating.
Risk warning: the project construction progress is lower than expected, policy risk and exchange rate fluctuation risk
