\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 323 Grandblue Environment Co.Ltd(600323) )
Event: the company released its annual report for 2021. In 2021, the company achieved an operating revenue of 11.777 billion yuan, a year-on-year increase of 57.41%; The net profit attributable to the parent company was 1.163 billion yuan, a year-on-year increase of 10.01%; The net profit deducted from non parent company was 1.124 billion yuan, with a year-on-year increase of 10.17%.
Comments:
The orders of solid waste business increased, and the cooperation of various sub businesses drove the growth of the company’s performance. According to the company’s annual report, the solid waste business revenue in 2021 was 6.568 billion yuan, accounting for 57.27% of the company’s main business revenue, with a year-on-year increase of 62.62%. Under the background of the “14th five year plan” strategic planning and increasing attention to environmental protection, the scale of the demand side has expanded, the company has strengthened its business expansion, and the business scale of solid waste treatment has been growing. In 2021, the company’s new domestic waste incineration power generation project has a total treatment capacity of 8300 tons / day, and some organic waste treatment projects and Nanhai industrial hazardous waste treatment projects are put into operation. In addition, the operating income of agricultural and industrial waste treatment in the sub business increased by 658% and 232% respectively, which is not limited to the waste incineration business. The company continues to strengthen the application of information and intelligent technology, develop a variety of solid waste treatment modes at the same time, and further improve the synergy and capacity utilization. However, due to the insufficient capacity utilization rate of newly put into operation projects and the relatively high cost proportion, the growth rate of net profit of solid waste business is lower than that of operating revenue of this sector.
Focus on the vertical and horizontal integration of solid waste business expansion and effectively explore profit growth points. The company seized the opportunity of building a “waste free city” at the national and local levels, firmly implemented the “big solid waste” strategy, explored a new business collaborative development model, and actively expanded its business. Vertically, the company will focus on the front-end sanitation business and other municipal services of incineration power generation. Based on the location of waste incineration power generation project, the company will form effective operation and management coordination with the project, improve business operation efficiency and form a new profit growth point; Horizontally, the company summarized the treatment experience of various pollution sources, focused on expanding relevant businesses in the location of waste incineration power generation projects, used various solid waste pollution sources to form resource coordination and effectively stimulate profit growth. As of the disclosure date of the annual report, the total scale of various treatment projects signed and implemented exceeded 700 tons / day. Through vertical and horizontal integration expansion, the company has effectively expanded the market scale and improved business synergy and profitability.
The scale of energy business expanded, the price of natural gas soared, the price difference between purchase and sales was upside down, and the net profit growth was lower than expected. According to the company’s annual report, in 2021, the energy business revenue reached 3.358 billion yuan, accounting for 29.28% of the company’s main business revenue, with a year-on-year increase of 79.19%. The sales volume of natural gas reached 987 million m3, with a year-on-year increase of 57.18%, a record high. However, the net profit of the energy business decreased significantly by 73%, mainly due to the continuous rise of the company’s comprehensive natural gas procurement cost and the price limit policy, which led to the upside down of the purchase and sales price difference of large users in the third quarter, the net profit of the natural gas business suffered a loss in the second half of the year, and the profitability of the energy sector decreased significantly year-on-year. The company has made positive progress in actively improving the gas supply system and expanding gas related businesses. Since March, some gas volumes have been purchased by agreement, the average sales price of natural gas has increased, and the upside down phenomenon of purchase and sales price difference is expected to be improved. At the same time, the company also actively expands other related businesses, such as gas engineering and insurance sales, so as to improve the profit space, with a view to realizing the profit and loss balance of energy business within this year.
Asset light business model + intelligent platform construction, water supply and drainage business has become a new performance growth point. According to the company’s annual report, the revenue from water supply business in 2021 was 984 million yuan, accounting for 8.58% of the company’s main business revenue, with a year-on-year increase of 7.75%; The company’s main business income was RMB 3.68 billion, accounting for 3.85% of the company’s year-on-year revenue. The main reason for the increase of main business income of water supply business is the reduction of the impact of the epidemic, and the industrial and commercial water sales and water supply engineering installation business have returned to the pre epidemic level; The main business income growth of drainage business is mainly due to the new operation income of Dali Industrial wastewater pipe network and pump station (including supplementary confirmation of previous years). During the reporting period, the company actively promoted the construction of four expansion projects (with a total scale of 80000 m3 / day) such as Jinsha Chengbei sewage treatment plant (phase II). It is expected to be put into operation in 2022, and the scale of drainage business continues to expand. The company has actively implemented the cost reduction and efficiency increase measures, carried out the intelligent construction of water supply and drainage system, and the operation of rainwater pipe network and other services are asset light, so the water supply and drainage business has formed a new profit growth point.
Maintain the “overweight” rating: the company’s three business sectors keep pace, the solid waste sector contributes to the basic performance, the water supply and drainage sector forms a new growth point, and the energy sector is expected to achieve profit and loss balance. The company takes the solid waste business as the center, extends the layout, and diversifys its business at the same time, so as to effectively give play to the synergy and make the operating cash flow more stable. Considering that the operation of waste incineration power generation project drives the growth of revenue, and the profit of the company’s gas sector decreases due to the rising price of natural gas, we have adjusted the company’s revenue and performance. It is estimated that the operating revenue of the company from 2022 to 2024 will be RMB 12.165 billion, RMB 12.664 billion and RMB 13.905 billion respectively (before adjustment, it will be RMB 10.728 billion and RMB 12.218 billion respectively in 2022 and 2023), with a year-on-year increase of 3.30%, 4.10% and 9.80% respectively. From 2022 to 2024, the net profit attributable to the parent company was 1.477 billion yuan, 1.685 billion yuan and 1.949 billion yuan respectively (1.648 billion yuan and 1.949 billion yuan respectively in 2022 and 2023 before adjustment), with a year-on-year increase of 26.93%, 14.12% and 15.63% respectively. It is estimated that the EPS from 2021 to 2023 will be 1.81, 2.07 and 2.39 yuan respectively, and the corresponding PE will be 10.3, 9.0 and 7.8 times respectively.
Risk warning event: the policy promotion is not as expected; The newly expanded capacity was put into operation less than expected; Intensified market competition; The market demand of downstream industries grows slowly.
