\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 323 Grandblue Environment Co.Ltd(600323) )
Key investment points
Event: in the first quarter of 2022, the company realized an operating revenue of 2.727 billion yuan, a year-on-year increase of 32.04%; The net profit attributable to the parent company was 159 million yuan, a year-on-year decrease of 34.3%.
The net profit of solid waste increased by about 69%, and the difference between the purchase and sale of gas is about to turn loss into profit. 1) Solid waste sector: the revenue increased by 38.42% to RMB 1.513 billion, and the net profit increased by 69% to RMB 248 million, which mainly benefited from the production of new waste incineration projects, the increase of environmental sanitation revenue, the continuous rise of project capacity utilization and ton online access, and the ton online access of 2022q1 company increased to 330 degrees. 2) Energy sector: revenue increased by 35.83% to 828 million yuan, mainly due to the increase of natural gas sales and the increase of average sales price.
Due to the rising international gas price and the gas distribution price limit policy, the energy business lost about 160 million yuan in 2022q1. The company has actively promoted the diversification of gas supply at favorable prices. From mid to late March, the gas volume and gas price of some industrial customers have increased. It is expected that the upside down of the price difference between purchase and sales of natural gas will be reversed in April.
3) drainage sector: the revenue increased by 42.92% to 147 million yuan, mainly due to the supplementary recognition 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.
The “big solid waste” strategy was steadily implemented, and the scale of waste incineration projects not put into operation accounted for 25%. By the end of March 2022, the company’s domestic waste incineration power generation projects in hand have a scale of 34150 tons / day (excluding joint-stock projects), including 25550 tons / day of put into operation, 500 tons / day of trial operation, 3350 tons / day of under construction, 1450 tons / day of preparation and 3300 tons / day of non construction.
Excluding the impact of accounting policies, the net operating cash flow is about 100 million yuan. 1) In 2022q1, the net cash flow from operating activities of the company decreased by 123.56% to -112 million yuan, mainly due to the year-on-year loss of energy business Q1, the lack of significant improvement in the collection of accounts receivable and the implementation of Interpretation No. 14 and relevant reporting provisions. Excluding the impact of Interpretation No. 14, the net cash flow from operating activities is about 100 million yuan; 2) The net cash flow from investing activities was -886 million yuan, an increase of 6.75% at the same time; 3) The net cash flow from financing activities was 742 million yuan, an increase of 21.36%.
The cost control was good, and the cost rate decreased by 2.54pct to 11.43%. Among them, the rates of sales, management, R & D and financial expenses decreased by 0.24pct, 0.95pct, 0.64pct and 0.71pct to 1.03%, 5.13%, 0.79% and 4.49% respectively.
The controlling shareholders increased their holdings, demonstrating their confidence in long-term development. Nanhai holdings, the parent company of the controlling shareholder of the company, plans to increase the total holdings of the company’s shares by no less than 6 million shares and no more than 10 million shares in the next six months. As of April 28, Nanhai holdings had increased its holdings of 3134700 shares, accounting for 0.38% of the total share capital.
Solid waste industrial park has the first mover advantage, benchmarking “waste free city”, reducing cost and increasing efficiency, and realizing remote replication. During the 14th Five Year Plan period, the state promoted the construction of 100 “waste free cities”. The company has built the first comprehensive park of the whole industrial chain of solid waste in China – Nanhai solid waste treatment and environmental protection industrial park, which has the advantages of minimizing the comprehensive social cost and first mover advantage. The comprehensive industrial park can realize cost reduction and efficiency increase through the three advantages of energy synergy, environmental protection facility synergy and treatment and disposal synergy. It has been successfully transplanted and popularized in Shunde, Kaiping and other provinces and cities, accumulated successful experience, and can be replicated and popularized in the future.
Profit forecast and investment rating: we believe that with its excellent horizontal expansion & integration ability, the company is expected to continue to expand and improve its profit scale, and the gas business is expected to usher in restorative growth at a favorable price. We maintain the forecast of net profit attributable to the parent company from 2022 to 2024 of RMB 1.37216361896 billion. The current market value corresponds to 11 / 9 / 8 times of PE from 2022 to 2024, maintaining the “buy” rating.
Risk warning: the progress of policy promotion projects is less than expected, the industry competition intensifies, and the policy risk
