\u3000\u3000 Shengyuan Environmental Protection Co.Ltd(300867) (300867)
Company profile: China's leading solid-liquid waste treatment operator. The main business of the company is domestic waste incineration power generation and domestic sewage treatment, and waste incineration power generation is the main source of income of the company. By 2021, the company's cumulative daily domestic waste treatment capacity has reached 13950 tons / day. With the company's domestic waste incineration power generation project and domestic sewage treatment project put into operation, the company's performance has increased rapidly. From 2017 to 2020, the compound annual growth rates of the company's income from waste incineration power generation business and sewage treatment business were 31.30% and 39.30% respectively.
Waste incineration power generation business: steady growth and build the basic performance of the company. After rapid development in the past decade, the waste incineration power generation industry has gradually entered a mature period of development. From 2020 to 2025, the compound growth rate of urban domestic waste incineration capacity is 6.64%, still showing a steady growth trend. In addition, since most of the projects of major waste incineration power generation enterprises will be connected to the grid in 2020 or start construction before 2021, they can still apply for renewable energy subsidies, and the number of bidding projects is also small. Therefore, the impact of national subsidy and bidding on waste incineration enterprises is relatively limited. With the gradual operation of the orders of the waste incineration project in hand and the technical transformation and upgrading, the company's waste incineration power generation business is expected to develop steadily, providing cash flow support for the development of the company's new energy business. At the same time, it is worth noting that the restart of CCER is expected to increase the income of the company's waste incineration power generation project and bring incremental profits to the company.
The prosperity of offshore wind power industry is improving. Under the background of promoting the "double carbon" target policy, Fengguang clean energy has ushered in development opportunities. During the 14th Five Year Plan period, the development and construction of offshore wind power will grow rapidly. According to GWEC's prediction, the annual compound growth rate of China's offshore wind power installed capacity will reach 23.55% in the next decade. In addition, in the future, the trend of large-scale offshore wind turbines will be promoted, the construction cost will decline after the "rush to install" and the price of offshore wind turbines will decline, which will help promote offshore wind power operators to reduce costs, improve power generation efficiency, increase the benefits of offshore wind power operators and benefit offshore wind power operators from the cost side.
Promote the layout of offshore wind power and open the second growth curve. Fujian's sea breeze resources are relatively high-quality. The annual average effective wind energy hours in Fujian coastal areas reach 7837.3h, and the annual average wind speed is mostly more than 7.5m/year. Catalyzed by the policy of stepping up the implementation of non-aqueous renewable energy consumption responsibility, it is expected that Fujian Province will accelerate the development of offshore wind power resources in the future. The company has been deeply cultivated in Fujian for many years and has strong advantages in project resources. Relying on its own project resource advantages, the company signed a cooperation agreement with the Three Gorges to jointly develop the offshore wind power project in Fujian Province. Three Gorges sailing is a private equity fund subordinate to Three Gorges group. In the future, the company is expected to obtain technical support from Three Gorges group in project development, construction and operation in the process of developing offshore wind power projects. The company is expected to rely on the support of the Three Gorges group to give better play to its resource advantages, effectively achieve the goal of comprehensively cultivating new energy industry, bring new sources of performance growth and achieve further performance growth.
Investment suggestion: the company's waste incineration power generation business and domestic sewage treatment have developed steadily and built a basic base for the company's performance. At the same time, the company will lay out its offshore wind power business, give full play to its resource advantages and cooperate with the Three Gorges to jointly develop offshore wind power projects in Fujian Province. The company will rely on the experience of offshore wind power development, construction and operation of the Three Gorges group to realize the effective implementation of offshore wind power projects. It is estimated that the company's revenue from 2021 to 2023 will be RMB 2.091 billion, RMB 2.305 billion and RMB 2.515 billion respectively, with a year-on-year increase of 102.30%, 10.21% and 9.13% respectively; The net profit attributable to the parent company was 510 million yuan, 626 million yuan and 765 million yuan respectively, with a year-on-year increase of 60.77%, 24.88% and 22.28% respectively, corresponding to EPS of 1.84, 2.30 and 2.82 respectively, and PE of 15.76, 12.62 and 10.32 times respectively. For the first time, give the company a "buy" rating.
Risk warning: the development of offshore wind power projects is less than expected, the implementation of policies is less than expected, the operation of waste incineration power generation projects is less than expected, the market competition is intensified, and the public data used in the research report may have the risk of information lag or untimely update.
