Core ideas:
The net profit of homing in 2021 increased by 39% compared with the same period last year, and the adjusted operating cash flow increased by 32% compared with the same period last year. The company released the 2021 annual report, with annual revenue of 5.057 billion yuan (year-on-year + 122.03%), of which construction income was 2.427 billion yuan, operating income was 2.277 billion yuan (year-on-year + 16%), and net profit was 698 million yuan (year-on-year + 38.62%). The company adjusts accounting standards to recognize construction revenue, superimposes waste incineration capacity to put into operation, and revenue performance grows at a high speed. The company realized 515 million yuan of operating cash flow in 2021, and the company included the cash outflow from operating activities as "the increase in the principal of long-term receivables of BOT projects and BT projects", which can be understood as investment in essence. If it is adjusted to investment cash flow, the actual net operating inflow in 2021 will be 1.456 billion yuan (+ 32.48% compared with the same period last year).
Construction revenue contributes nearly 50% of revenue, and production capacity keeps growing at a high speed. In 2021, the company's solid waste disposal business revenue of 2.619 billion yuan (year-on-year + 22%), income and in-service capacity still showed a highly positive correlation trend. At the end of 2021, the company has a transport capacity of 33600 tons / day, with an additional 7500 tons / day put into production this year, and a capacity of 4800 tons / day under construction. The company issues convertible bonds to raise 2.36 billion yuan for the construction of five incineration projects, with a corresponding production capacity of 5000 tons per day, reflecting rapid growth.
The operating efficiency continues to improve, and the self-developed incinerator has technical barriers. The company's national layout and operating efficiency continued to improve, the company handled 10.5376 million tons of domestic waste this year, an increase of 17.4% over the same period last year, and the amount of electricity on the Internet was 3.329 billion, an increase of 22.1% over the same period last year. Ton power generation and ton online electricity were 383 kwh/t and 316kwh/t respectively, up 3.79% and 3.97% respectively over the same period last year, a record high. In addition, the company has a self-developed incinerator, 800 tons has been in trial operation in 2021.
Profit forecast and investment advice. It is estimated that the return net profit of the company from 2022 to 2024 will be 1.527 billion yuan, respectively, and the PE of A shares corresponding to the latest closing price will be 8.0 times that of 12.2 pounds. Considering the valuation of the comparable company and the growth rate of the company's performance, the company will be given 20 times PE in 2022, corresponding to a reasonable value of 14.28 yuan per share, with reference to the premium ratio of the company's AH shares, and a reasonable value of HK $5.86 per share corresponding to H shares. Maintain a "buy" rating.
Risk hint. The progress of production is lower than expected; the climbing of production capacity is slow; the distribution speed of state subsidy is slow.