Event: the company released its mid-2021 report, with revenue of 481 million yuan, an increase of 41.63% over the same period last year, and a net profit of 0.083 million yuan, an increase of 57.46% over the same period last year. ROE (weighted) fell about 1 percentage point year-on-year to 4.46 per cent. With the current net amount of-12 million yuan, the net outflow decreased significantly by 82.95% compared with the same period last year.
The financial results continued to improve steadily, and the continued high growth of more than 900 million new orders was highly deterministic. The company's sales gross profit margin increased by 0.49 percentage points to 35.67%; the expense rate decreased by 0.4 percentage points to 15.23% during the period; the company's net interest rate increased by more than 2 percentage points to 18.10%, resulting in a continuous improvement in profitability; the asset-liability ratio was 56.90%. At a relatively reasonable level; as waste incineration projects are gradually put into operation, the company's cash flow has also improved significantly. The overall financial situation of the company continues to be sound and sound. During the reporting period, the company signed 227 million EPC orders, with 621 million of unconfirmed revenue orders on hand, and 707 million of newly signed operational orders, ensuring high growth in future operations.
The sewage treatment capacity will reach 1 million tons per day, and the performance is expected to continue to improve. In 2020, the company has a sewage treatment capacity of more than 800000 tons. Tongcheng 28,000 tons / day, Dalian 50,000 tons / day, Shandong Taian 97,000 tons / day and other projects are expected to be put into production. It is estimated that by the end of the year, the company's total sewage treatment capacity will reach about 1 million tons per day. In 2021, the bid raising and transformation of the two Taian plants (with a total treatment capacity of 170,000 tons per day) has been completed, which will improve the income level of the sewage treatment plate. Under the background of the gradual introduction of new production capacity, the company's sewage treatment sector performance is expected to continue a steady growth trend.
Waste incineration has become a pole of performance growth, and the release of convertible bonds can be accelerated. The company's existing waste incineration capacity amounts to about 5000 tons per day (including). The acquired Shijiazhuang project has a capacity of 1200 tons per day, which is one of the main profit growth points this year. Chengde project (400t / day), Dancheng project (800t / day) and Xixiang project (600t / day) are expected to be put into production in the next two or three years. The company plans to issue no more than 864 million yuan of convertible bonds for the construction of Chengde and Dancheng projects and supplement the cash flow. The funds raised will help to accelerate the release of the company's waste incineration capacity.
Investment rating: it is estimated that the company's net profit in 2021-23 will be RMB 376 million, corresponding to PE14/11/8.8 times. The company has high growth and strong sustainability, maintaining a "buy" rating.
Risk Tip: the risk that the company's project is not as good as expected, and that new orders are not as expected.