Items:
Dongzhu Ecology announced its semi-annual report for 2021: the company achieved operating income of 1.277 billion yuan, + 5.57% year-on-year, net profit of 277 million yuan, + 11.79% year-on-year, and net operating cash flow of-273 million yuan, an increase of 12 million yuan over the same period last year.
Comments:
The revenue performance has increased steadily, and the garden leader under the carbon-neutral background is expected to benefit: during the reporting period, the company achieved 1.277 billion in revenue, + 5.57% in the same period last year, and 277 million in net profit, + 11.79% in the same period last year. Quarter by quarter, Q1-Q2 revenue growth rate is + 26.76%,-5.43%, home net profit growth rate is + 26.05%, + 5.10%. In terms of orders, the company's 2021H1 newly won the bid amount of 1.218 billion yuan, an increase of 41.46% over the same period last year; the newly signed project amount was 1.164 billion yuan, an increase of 29.05% over the same period last year. Under the long-term goal of "2030 carbon peak and 2060 carbon neutralization", the company, as one of the leaders in the garden ecological industry, will focus on building two main business lines of ecological restoration and municipal landscape in the future. at the same time, ecological environment protection, water environment management and other multi-plate coordination, is expected to continue to benefit the development of the industry.
Profitability is steadily rising, and cash flow continues to improve: the company's 2021H1 gross profit margin is 31.28%, year-on-year + 1.02pct, and net profit rate is 21.86%, year-on-year + 0.92pct. Period rate 5.36%, year-on-year + 0.38pct, itemized, management, R & D, financial rates + 0.29pct, + 0.07pct, + 0.02pct, respectively, management rates increased significantly, mainly due to the epidemic in the same period last year, the promotion of online office and contact business, the reduction of office expenses and travel expenses, and the reduction of social security fees in stages of the epidemic; R & D expenditure was + 8.80% to 31 million yuan compared with the same period last year.
The net operating cash flow was-273 million yuan, which was + 12 million yuan compared with the same period last year, mainly due to the various measures taken to increase the recovery of project funds during the reporting period. The cash-to-cash ratio is 33.74%, year-on-year + 17.12pct. Accounts receivable turnover days are + 8 days to 117 days compared with the same period last year. The asset-liability ratio is 56.10%, year-on-year + 3.12pct, and there are still no interest-bearing liabilities.
Vigorously develop the EPC model, actively layout the industrial chain resource integration: 1) further enhance the attributes of ecological restoration and environmental protection, and explore multiple project models: the company increases the EPC business layout and strengthens the advantages of the integrated industrial chain of design and construction, which is helpful to improve the stability of the project and optimize the cash flow. 2) benefit from rural revitalization, new urbanization and new infrastructure policy dividends: the Central Economic work Conference will clearly "speed up the construction of ecological civilization"
Listed as one of the 8 key tasks for high-quality development, ecological and environmental protection is an important starting point for this infrastructure to make up for deficiencies, and the industry meets important opportunities; 3) actively layout carbon sequestration business: during the reporting period, the company signed a cooperation agreement with Shanghai Environmental Energy Exchange Co., Ltd., Green Technology Bank (Shanghai) Science and Technology Development Co., Ltd., actively develop forestry carbon sequestration and other aspects of business, which is expected to contribute new performance growth points in the future. 4) enhanced incentive for employee stock ownership: the company issued the first draft employee stock ownership plan on April 15, 2021, with no more than 150 participants and a repurchase price of 9.37 yuan per share. the performance evaluation requirements are: based on the performance in 2021-2023, the performance growth rate is not less than 20%, 38%, 58.7% respectively.
Earnings forecast, valuation and investment rating: the company has sound revenue and abundant orders. we expect the company's EPS from 2021 to 2023 to be 1.04,1.23,1.43 yuan per share (the original value is 1.46,1.72,2.00 yuan per share, mainly due to changes in equity), with a corresponding PE of 10x, 8x and 7x. Under the background of carbon neutrality, the demand for eco-environmental protection is growing day by day, and the company is a leading enterprise in the industry, with good cash flow and no interest-bearing liabilities, which is valued at 15 times in 2021, corresponding to the target price of 15.6 yuan, maintaining a "strong push" rating.
Risk hint: the new project is not as expected, the project payback is not as expected, and so on.
