\u3000\u3000 Dayu Water-Saving Group Co.Ltd(300021) (300021)
Rural Revitalization is promoted, and the industry space is expected to be opened
Rural Revitalization was promoted, and the construction of high standard farmland was accelerated. The national high standard farmland construction plan (2021-2030) specifies that 1.075 billion mu of high standard farmland will be built in 2025. From 21 to 22, 100 million mu of high standard farmland will be built every year, which is faster than the target of 80 million mu during the 13th Five Year Plan period. The 14th five year plan for the construction of a water-saving society requires the addition of 60 million mu of efficient water-saving irrigation area and the creation of 200 water-saving irrigation areas. China’s rural water conservancy market will usher in broad development space.
The industry concentration is low, and the leading enterprises hope to accelerate the integration. The concentration of water-saving irrigation industry is not high, the scale of enterprises is generally small, and the homogeneity of products and services is serious, with CR10 no more than 20%. The market penetration of leading enterprises is expected to accelerate, and the industry concentration continues to improve. The revenue growth rates of Dayu, Tianye and runnong in 2021q3 are 54%, 52% and 19% respectively.
Business extension is expected to open space. The head company relies on agricultural water projects to cut into agricultural production in all regions of the country. In the future, it is expected to extend from a single project business to irrigation services, comprehensive agricultural services and agricultural big data, enhance business penetration and open performance space.
The company polished its internal strength and established “all” core advantages
Advantages of national layout: Dayu Water-Saving Group Co.Ltd(300021) is one of the few national business layout enterprises in the industry. It has accumulated rich resources and experience in various places and has the ability to get orders nationwide. The company has deeply cultivated the national market, has established 7 production bases in the country, and has set up management headquarters in various regions, which has significantly improved its influence.
Advantages of whole chain integration: Dayu Water-Saving Group Co.Ltd(300021) has layout in the whole chain of design, R & D, production, construction, operation and digitization. Design: it controls Hangzhou Design Institute, Lanzhou Design Institute and Jiuquan Design Institute, forming the design force of Hangzhou Lanzhou Jiuquan national overall layout. Construction: leading the industry with 656 patents and first-class general contracting qualification, with outstanding engineering construction capacity. Digitization: through the acquisition of huitu technology, build huitu SaaS cloud platform, sign a strategic cooperation agreement with Huawei, comprehensively build agricultural and water informatization and digital intelligence, and transform and upgrade to agricultural technology and service companies.
Advantages of full mode innovation: Dayu Water-Saving Group Co.Ltd(300021) has successfully carried out PPP, EPC, epc-om and other cooperation modes in various places, accumulated valuable experience, and is expected to accelerate the layout nationwide.
Relying on its competitive advantages, the company has increased orders and strengthened its response ability to the payment collection cycle
As of December 22, 2021, the company had signed new orders of RMB 5.402 billion, an increase of 8.67% year-on-year. In 2020, the number of large orders continued to rise, with 36 orders of more than 20 million yuan, a year-on-year increase of 227%. The company solves the problem of payment collection cycle in a multi pronged manner. On the one hand, it will raise 300 million yuan to supplement liquidity and be used for project construction. On the other hand, it will gradually improve the account collection scheme to deal with the collection pressure, so as to ensure the sound operation of the enterprise.
Investment advice
Under the general trend of rural revitalization, the construction of high standard farmland and agricultural water in the 14th five year plan has been accelerated, which has brought benefits to the industry. Agricultural and water head enterprises have established core advantages, strengthened their ability to get orders, and the industry is expected to accelerate the concentration. Meanwhile, in the future, the comprehensive agricultural service and agricultural big data business will be expanded based on agricultural and water projects, and the performance space is expected to be opened.
Dayu Water-Saving Group Co.Ltd(300021) is a leading enterprise in China’s traditional farmland water conservancy industry, integrating the R & D, manufacturing and sales of farmland water conservancy products and the design, construction and service of farmland water conservancy projects. The company has established the core advantages of the whole region, the whole chain and the whole mode, and the comparative advantages of the industry are obvious. Establish strategic cooperation with Huawei and local governments, and continuously strengthen the ability to get orders. The order scale will reach a new high in 2021, which will provide support for future performance.
We estimate that the net profit attributable to the parent company from 2021 to 2023 will be 157 million yuan, 241 million yuan and 340 million yuan respectively, and EPS will be 0.20 yuan, 0.30 yuan and 0.42 yuan respectively, corresponding to 30 times, 20 times and 14 times of PE respectively, giving a “buy” rating.
Risk tips
\u3000\u30001. The implementation progress of the project is easily affected by the epidemic and other force majeure, and the realization speed of the company’s orders is lower than expected.
\u3000\u30002. There is a certain pressure on the local government finance of some projects of the company, which may encounter the problem of slow collection, and the effect of accounts receivable management is not obvious, resulting in the pressure on the company’s cash flow.
\u3000\u30003. Large state-owned enterprises and information technology group enterprises have deep cooperative relations with local governments, and may compete with Dayu Water-Saving Group Co.Ltd(300021) in the process of taking orders for digital agricultural and water projects. The industry competition intensifies, and the taking of orders is less than expected.
\u3000\u30004. The compliance problems of data collection and use rights brought by agricultural water digitization business face certain regulatory risks..
