Grandblue Environment Co.Ltd(600323)
Nanhai holdings increased its stake in the company and strengthened its confidence in rapid development. Based on the recognition of the company’s long-term investment value and firm confidence in the company’s sustainable and stable development in the future, Guangdong Nanhai holdings investment Co., Ltd. (hereinafter referred to as “Nanhai Holdings”), the parent company of the company’s controlling shareholder, increased its shareholding in the company through the trading system of Shanghai Stock Exchange on April 11, 2022. Before this increase, Nanhai holdings held 120million shares of the company, accounting for 14.7% of the company’s total share capital, Nanhai holdings and its persons acting in concert held 300 million shares of the company, accounting for 36.8% of the total share capital of the company; Nanhai holdings increased its holdings of 1.02 million shares of the company, accounting for 0.1% of the total share capital of the company. It is expected that the total number of additional holdings in the next six months will not be less than 6 million shares and not more than 10 million shares (including this increase).
The second phase of executive equity incentive is released, and the future development can be expected. In August 2021, the company issued the second phase of executive incentive system. The incentive objects are the general manager, deputy general manager, financial director, Secretary of the board of directors and other personnel that the board of directors deems appropriate. Executive compensation consists of basic compensation, performance compensation, value-added rewards (including market value growth and dividend rewards, which are paid in cash) and special contribution awards. Performance compensation is linked to performance contribution to stimulate executive motivation and consolidate the level of excellent governance.
Vertical and horizontal integration of large solid wastes and expansion of new energy application layout. ① By the end of 2021, the scale of the company’s domestic waste incineration power generation project was 34150 tons / day. Among them, the newly completed and confirmed income domestic waste incineration power generation project has a total scale of 8300 tons / day, the scale of trial operation + Construction in progress + preparation project is 5300 tons / day, and the waste incineration capacity continues to be released; In addition, the company extends from domestic waste incineration power generation to other types of solid waste treatment business, and carries out the vertical and horizontal integrated layout of “big solid waste”. Under the background of high prosperity of solid waste, the company hopes to continuously extend the industrial chain to sanitation, kitchen and other projects in the cities where it has been distributed with the help of waste incineration project resources, and the order is worth looking forward to. ② In addition to the vertical and horizontal integration of “big solid waste”, the company has carried out asset light layout. In 2022, the design scale of 2200 ton Foshan Nanhai hydrogen production project was launched, and the company is set to actively explore the layout of new energy business, which can be expected in the future.
Investment suggestion: the company has sufficient on-hand waste incineration projects to ensure future performance growth, and relying on on on-hand project resources, the environmental sanitation, kitchen and other solid waste projects in the layout area are worth looking forward to; In addition, the company’s gas and water sectors are growing steadily, providing excellent cash flow and looking forward to the favorable price of gas in the future; The second phase of executive incentive deeply binds the interests of employees and the company and helps the company develop rapidly. The announcement of the shareholding increase plan shows the confidence of rapid development. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 1.51/18.2/1.93 billion, and the corresponding PE will be 9.7/8.1/7.6x respectively. At present, it is at the bottom of the valuation, superimposed with the excellent management level of the company and maintained the “buy” rating.
Risk tips: the production progress of solid waste projects is less than expected, the industry competition intensifies, the risk of policy changes, etc.
