\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 323 Grandblue Environment Co.Ltd(600323) )
In 2022q1, affected by the gas sector, the net profit decreased. The company achieved a revenue of 2.73 billion yuan (YoY + 32.0%) in 2022q1; The net profit attributable to the parent company was 160 million yuan (yoy-34.3%), and the revenue increased year-on-year while the net profit decreased, which was mainly affected by the rising cost of comprehensive natural gas procurement and limited by the price limit policy, resulting in the inversion of natural gas procurement and sales prices. Affected by the above reasons, the energy business lost about 160 million yuan in the first quarter, and the net profit decreased by about 180 million yuan year-on-year.
The solid waste and drainage sectors have achieved high growth, and we look forward to the favorable price of gas in the future. In 2022q1, ① the main business income of solid waste treatment business was 1.51 billion yuan, with a year-on-year increase of 38.4%, mainly due to the continuous production of new projects such as Zhangzhou and Ulanqab since the second half of last year and the increase of environmental sanitation business income; ② The main business income of energy business was 830 million yuan, with a year-on-year increase of 35.8%, mainly due to the increase of natural gas sales and the increase of average natural gas sales price; ③ The main business income of drainage business was 150 million yuan, with a year-on-year increase of 42.9%, mainly due to the supplementary confirmation of the settlement income of sewage treatment during the transition period of some sewage treatment plants and the increase of operating income of sewage pipe network. On the one hand, the company will actively communicate with the competent government departments and straighten out the natural gas price mechanism. On the other hand, it will actively promote the diversification of upstream high-quality gas source supply and structure, actively expand gas engineering business, non fuel business and other businesses, and strive to achieve the profit and loss balance of energy business in 2022.
The profit margin decreased and the expense rate decreased during the period. In 2022q1, the gross profit margin of the company was 18.9% (- 8.9pct) and the net profit margin in the same period was 6.1% (- 5.5pct). The gross profit margin and net profit margin have decreased, mainly due to ① insufficient utilization of the production capacity of newly put into operation kitchen and industrial hazardous waste, and the profitability is lower than that of waste incineration power generation projects. The company may seek a breakthrough in the field of resource utilization of hazardous waste; ② Natural gas sales and purchase prices are upside down. In 2022q1, the sales expense rate is 1.0% (- 0.2pct), the management expense rate is 5.1% (- 0.9pct), and the financial expense rate is 4.5% (- 0.7pct). The expenses are properly controlled. Cash flow from operating activities was – 110 million yuan, down 590 million yuan from the same period last year, mainly due to ① large year-on-year loss of energy business in the first quarter; ② The collection of accounts receivable has not been significantly improved; ③ According to the provisions of Interpretation No. 14, if the impact of No. 14 is excluded, the cash flow from operating activities is about 100 million yuan.
Vertical and horizontal integration of large solid wastes and expansion of new energy application layout. 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, and the scale of trial operation + Construction in progress + preparation project is 5300 tons / day, with continuous release of production capacity. In addition, the company carries out vertical and horizontal integration of “big solid waste” and asset light layout; In 2022, Foshan Nanhai hydrogen production project with a design scale of 2200 tons was launched, and the company actively explored the layout of new energy business.
Investment suggestion: the company has sufficient waste incineration projects in hand; The gas and water sectors grew steadily and provided excellent cash flow; The second phase of executive incentive deeply binds the interests of employees and the company, and helps the company develop rapidly. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 1.34/15.4/1.78 billion yuan, corresponding to PE of 10.7/9.3/8.1x respectively. The company has excellent management and maintains 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.
