Main points of investment
Event: the company issued the 2021 annual report, achieving revenue of 499 million yuan, with a decrease of 3.74%; the net profit of returning to the mother was 109 million yuan, with a decrease of 12.7%; the proposed cash dividend of 0.68 yuan (including tax) for every 10 shares, and the corresponding dividend yield of 0.14%.
The subsidy is carefully confirmed that the profitability is stable after the restoration. In 2021, the company's gross profit margin reached 41.03%, with a reduction in 4.21pct. Biogas utilization is the company's main business, accounting for 93.97% of the revenue. The decline in the company's operating income and gross profit margin is mainly due to changes in accounting methods. For projects that have been put into production but have not yet been included in the subsidy catalogue, the state subsidy income is not recognized in the current period. In 2021, the amount of subsidies not included in the company reached 25.3394 million yuan. After adding back the subsidy income, the actual operating income reached 525 million yuan, a slight increase of 1.14% over the same period last year, and the gross profit margin was 46.10%. With the same rise in 0.87pct, the profitability was stable.
The installed capacity of biogas power generation reached 188.01MW, an increase of 9.79% over the same period last year. By the end of 2021, the company has put 94 biogas power generation projects into operation in Henan, Anhui, Hubei, Zhejiang, Guangdong and other provinces (municipalities and autonomous regions directly under the Central Government). The installed capacity of the network is 188.01MW, which is 9.79% higher than that of 171.25MW at the end of 2020. the growth rate of operating income is lower than that of installed capacity mainly due to 1) the total 19.806MW scale of the acquisition of 3 Veolia companies in 2021 is only in the fourth quarter of the table. The annual contribution increment will be realized in 2022. 2) some stock projects are cancelled due to the decrease of biogas resources supply and the weakening of project profits.
The net operating cash flow also decreased by 13.29% to 122 million yuan. 1) in 2021, the net cash flow of the company's operating activities was 122 million yuan, with a decrease of 13.29%. 2) the net cash flow of investment activities was-258 million yuan, with a decrease of 88.29%. 3) the net cash flow of fund-raising activities was 248 million yuan, an increase of 1615.49%.
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. Landfill gas kilowatt-hour electricity reduction 0.00578tCO2, we expect to increase the kilowatt-hour electricity by 0.17max 0.35pm 0.58 yuan under the carbon price of 30max 60x100 yuan, and the profit end elasticity can reach 101.77% 203.54% ash 339.23%. The company has a mature carbon asset development team, benefiting from the greatest flexibility of carbon trading.
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 10 years. Company 1) large-scale: 94 biogas power generation projects, and grid installed capacity 188.01MW; 2) excellent technology: per ton investment is lower than that of the same industry, gas collection rate and power generation efficiency are high; 3) strong profit: gross profit margin is higher than peer average, 150t/d small projects can be profitable; 4) wide expansion: horizontal expansion of kitchen, aquaculture dung, rural biogas utilization to open new markets.
Profit forecast and investment rating: taking into account the change in the accounting method of the company's subsidies, the rhythm of new projects and the maturity of stock projects, we have lowered the company's 2022-2023 net profit from 2.34 / 302 million yuan to 132,000,000 yuan. It is estimated that the net profit will be 207 million yuan in 2024, corresponding to the PE times of PE in 39-31-25, maintaining the "buy" rating.
Risk hints: insufficient landfill gas, changes in subsidy policies, and intensified market competition
