Items:
Dongzhu Ecology announced the third quarterly report for 2021: the company achieved operating income of 1.791 billion yuan, + 2.10% year-on-year, net profit of 360 million yuan, + 3.28% year-on-year, and net operating cash flow of-602 million yuan, an increase of 159 million yuan over the same period last year.
Comments:
Base reasons led to a decline in Q3 performance: the company achieved operating income of 1.791 billion yuan during the reporting period, + 2.10% year-on-year, and return to the mother net profit of 360 million yuan, + 3.28% year-on-year. Quarter by quarter, Q1-Q3 revenue growth rate is + 26.76%,-5.43%,-5.62% respectively, and home net profit growth rate is + 26.05%, + 5.10%,-17.72% respectively. We believe that the year-on-year decline in the company's Q3 performance may be from a higher base in the same period last year. 2020Q3's single-quarter revenue and performance growth rates are 61% and 121% respectively. 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.
The impact of costs and expenses, profitability declined slightly: the company's gross profit margin in the first three quarters of 2021 was 29.6%, year-on-year-0.37pct. Net interest rate 20.26%, year-on-year-0.15pct. Period rate 5.56%, year-on-year + 0.49pct, itemized, management rate, R & D rate, financial rate + 0.3pct, + 0.79pct,-0.6pct respectively.
The net operating cash flow is-602 million yuan, which is-159 million yuan compared with the same period last year. We believe that this is mainly due to an increase in supplier project payments during the reporting period, resulting in an increase of 460 million in cash paid for goods and services compared with the same period last year. The cash-to-cash ratio is 34.69%, year-on-year + 16.45pct. The asset-liability ratio is 56.54%, which is + 3.47pct compared with the same period last year. The turnover days of accounts receivable are basically the same as the same period last year, still 120 days.
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: we maintain the estimated EPS of 1.04,1.23,1.43 yuan per share in 2021-2023, and the corresponding PE of 12x, 10x, 8x. Under the background of carbon neutrality, the demand for eco-environmental protection is growing day by day. Referring to the valuation center of the company from 2019 to the present, we give a valuation of 15 times in 2021, corresponding to the target price of 15.6 yuan, and maintain a "strong push" rating.
Risk hint: the decline risk of investment in the garden industry, the acceptance of new projects is not as expected, the return of the project is not as expected, and so on.
