Main points of investment
Event: in the first half of 2021, the company realized revenue of 251 million yuan, a decrease of 0.73%, a net profit of 75 million yuan, an increase of 12.03%, and a non-return net profit of 73 million yuan, an increase of 7.99%.
With the steady growth of performance, Muyuan cooperation has opened up a broad space for agricultural biogas power generation. 2021H1's comprehensive gross profit margin is 46.23%, with an increase of 1.14pct. Of this total, biogas power generation achieved revenue of 231 million yuan, down 7.20%, mainly due to unrecognized income from project subsidies put into production after January 20, 2020, with a gross profit margin of 45.86% and an increase in 0.86pct, and the cost control capacity was further strengthened.
According to the official website, as of August 11, 2021, the company has six projects connected to the grid and put into production this year, with a total installed capacity of 12.35MW, an increase of 7.21% over the end of 2020. 1) Landfill biogas power generation: Tongnan Project (3MW), Nanzhao Project (1.5MW), Nankang Project (5MW), Puyang Taiqian Project (1.5MW) and Guangxi Quanzhou Project (1MW) 2) fecal biogas power generation in farms: eight farms of manure biogas power generation project in Muyuan Sheqi County (0.35MW). The project is the first power generation project completed in the cooperation between the company and Muyuan Co., Ltd., which takes 3 months from the establishment of the project to the completion of construction, 1.2 million kilowatt-hours of electricity supply per year, and CO2 emission reduction of more than 7900 tons per year. The company and Muyuan realize the win-win situation of comprehensive utilization of aquaculture manure and open up a broad space for the utilization of agricultural biogas.
Priority will be given to accelerating the layout of carbon trading, and VCS is expected to make substantial gains this year. 2021H1 increases the staff of the carbon trading department and expands the scope of cooperation to speed up the registration, certification and trading of VCS and GS-VER. The company has completed VCS registration for four projects, which is expected to achieve substantial benefits this year; respond to CCER restart in advance and try to file, register and certify the project as soon as possible.
The net operating cash flow remained at a normal level. 1) in the first half of 2021, the net cash flow of the company's operating activities was 43 million yuan, with a decrease of 2.4%. 2) the net cash flow of investment activities was-86 million yuan, with a decrease of 39.30%. 3) the net cash flow of fund-raising activities was 355 million yuan, an increase of 1423.82%.
Landfill gas power generation has a significant emission reduction effect, and carbon trading increases the profit by 102% to 339%. After the launch of the national carbon market, the demand for CCER is released, and short-term scarcity prices are bullish. The kilowatt-hour electricity of landfill gas is reduced by 0.00578tCO2, 30max, 60max, 100 yuan, under the carbon price of 100 yuan, the kilowatt-hour electricity is increased by 0.17, 0.35, 0.58 yuan, and the profit end elasticity is 101.77%, 203.54%, 339.23%. The company has a mature carbon asset development team, benefiting from the greatest flexibility in carbon trading. Under the scenario of CCER carbon price 30 Universe, compared with the 2020 results, the theoretical elasticity of CCER to the net profit side is 102.70%, 205.40% and 342.34%.
The industry penetration is low and the space is large, and the company has rich experience & leading technology, extension and extension to promote capacity expansion.
The permeability of landfill gas power generation is only 12% to be improved, and organic waste disposal opens up the blue ocean market for biogas utilization. Policy-driven by emission reduction, biogas power generation capacity in China is expected to be 50 times in ten years.
Company 1) large scale: 82 projects have been put into operation at the end of the 20th year, with installed capacity of 171MW; 2) excellent technology: per ton investment is lower than that of the same industry, gas collection rate and power generation efficiency are high; 3) profitable: gross profit margin is 49% higher than the average of the industry 10pct550t pictured small projects can be profitable; 4) wide expansion: fund-raising projects contribute 33% increment, acquisition of Veolia large-scale projects, horizontal expansion of food, kitchen, rural biogas utilization.
Profit forecast and investment rating: from 2021 to 2023, we maintain the company's homing net profit forecast of RMB 160 million, an increase of 27.83%, 46.62%, 28.99%, and 1.88 yuan, respectively. Corresponding to the 42-29-22 times PE,CCER price of 30 pounds, 100 yuan / t CO2, the theoretical profit elasticity is expected to reach 95% RMB 330%, maintaining the "buy" rating.
Risk hints: insufficient landfill gas, changes in subsidy policies, and intensified market competition
