\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 475 Wuxi Huaguang Environment & Energy Group Co.Ltd(600475) )
Event: the company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company’s revenue was 8.377 billion yuan, a year-on-year increase of 6.05%; The net profit attributable to the parent company was 755 million yuan, a year-on-year increase of 17.38%; Net profit deducted from non parent company was 631 million yuan, with a year-on-year increase of 29.66%. In the first quarter of 2022, the company’s revenue was 1.969 billion yuan, a year-on-year increase of 12.42%; The net profit attributable to the parent company was 207 million yuan, a year-on-year increase of 0.24%; Deduct the net profit not attributable to the parent company of 203 million yuan, with a year-on-year increase of 0.20%; The net cash flow from operating activities was 42 million yuan, a year-on-year increase of 339.34%.
Comments:
The revenue of project operation management business increased significantly. In 2021, the project operation and management realized an operating revenue of 3.019 billion yuan, a year-on-year increase of 40.75%. The operating revenue of equipment manufacturing was 2.458 billion yuan, a slight decrease of 6.85% year-on-year. The total operating revenue of engineering and services was 2.834 billion yuan, a decrease of 6.27% year-on-year. Among them, the business revenue of municipal environmental protection engineering increased, an increase of 13.22% year-on-year. The comprehensive gross profit margin of the company’s main business is 19.61%, 1.93 PCT higher than that in 2020. The profit available for distribution to shareholders in 2021 is 1.969 billion yuan. The distribution plan is to distribute cash dividends of 3.5 yuan (including tax) for every 10 shares and 3 bonus shares (including tax) for every 10 shares. In the first quarter of 2022, the net cash flow from operating activities increased significantly due to the decrease of various deposits paid.
Two wheel drive of energy and environmental protection, increased production capacity and increased revenue significantly. The daily treatment capacity of the domestic waste incineration project put into operation and managed by the company is 4100 tons / day (2500 tons / day will be added in 2021 and 700 tons / day will be under construction). The sludge disposal project has been put into operation with a scale of 2490 tons / day. In addition, the kitchen waste disposal project has been put into operation with a scale of 440 tons / day, and the cyanobacterial sludge disposal project has been put into operation with a scale of 1000 tons / day. The expansion of power business has been significantly improved, and the integrated and refined management has been effective. In 2021, the company completed the acquisition of Wuxi Lantian, and the thermal power business revenue increased significantly, providing the company with high-quality cash flow. The company’s four thermal power operation enterprises completed a total heat sales of 7.1112 million tons throughout the year, and the return rate of thermal receivables is about 100%; Through fine management, the pipe loss was controlled at 6.81%, which was 2.96 PCT lower than that of last year. The equipment manufacturing and engineering service business remained stable. As a leading enterprise in the boiler equipment industry, the company paid attention to the environmental transformation and expansion of equipment manufacturing.
Actively expand business layout in combination with its own advantages and industry development trend. In order to achieve the target layout of carbon neutralization and improve the market competitiveness in the field of clean energy, the company actively acquired the main operators of natural gas cogeneration and photovoltaic power generation through equity investment and M & A in 2021. Through the acquisition of Wuxi Lantian, the company incorporated it into the unified dispatching scope of Wuxi large heat network, further expanding the company’s heating dispatching space, which is conducive to the release of capacity at each heat source point and improving energy utilization. Through the acquisition of CSCEC Guolian, the photovoltaic power generation operation sector has been expanded. At present, CSCEC Guolian has 37 mature photovoltaic operation projects with an installed capacity of 277.45mw, which has laid a good foundation for the company to speed up the layout of new energy. In addition, at present, the installed capacity of gas turbines in operation and under construction of the company is 594mw. Jiangyin thermal power, a joint-stock company of the company, has completed the natural gas cogeneration project with an installed capacity of 2 100MW, and plans to build a 2 400MW natural gas power generation project, which has been officially approved by the national development and Reform Commission and Jiangsu Provincial Development and Reform Commission. With the continuous development of the newly incorporated business, it will bring strong growth points 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 2022 to 2024 will be RMB 11.525 billion, RMB 14.083 billion and RMB 17.609 billion respectively, with a year-on-year increase of 37.58%, 22.19% and 25.04% respectively, and the net profit attributable to the parent company will be RMB 941 million, RMB 11.16 billion and RMB 1.280 billion respectively, with a year-on-year increase of 24.60%, 18.56% and 14.75% respectively; The corresponding EPS were 1.29, 1.54 and 1.76 respectively, and PE were 8.11, 6.84 and 5.96 times respectively. Maintain the “buy” rating.
Risk warning: policy promotion is not as expected; Intensified market competition; The market demand of downstream industries grows slowly.
