Core ideas:
The net profit of homecoming in 2021 increased by 55.6% over the same period last year, with remarkable achievements in improving quality and increasing efficiency. In 2021, the annual revenue was 22.233 billion yuan (year-on-year + 15.6%), the return net profit was 2.287 billion yuan (+ 55.6% year-on-year), and the non-return net profit was 1.634 billion yuan (+ 19.5% year-on-year). In addition, the company disposed of Shenzhen water and Jiujiang first profit pool equity during the year, and confirmed the investment income of 720 million yuan. The company has achieved remarkable results in improving quality and efficiency, with both light and heavy assets on the investment side, driving the company's ROE to increase its 2.6pct to 8.3%.
The proportion of water business operation continues to increase, issuing the first sewage treatment public offering REITs in China. The company's water operation business (including water supply services) achieved a total income of 8.81 billion yuan (year-on-year + 23.9%), and water construction business (including urban water construction and comprehensive management of water environment) achieved a total income of 4.877 billion yuan (year-on-year-15.9%). The proportion of operation continues to increase. The company's total water production capacity (including equity participation) reached 25 million tons per day, with a new production of about 146.04 million tons per day last year. In recent years, the average price of per ton of tap water and per ton of sewage treatment has continued to rise, rising by 9.2% and 13% respectively in 2021.
The company issued the first sewage treatment public offering REITs in China, which was listed for about 11 months, an increase of 59%. The company superimposed the company to dispose of other water projects, and its assets continued to be invigorated.
With the rapid growth of solid waste business, it is proposed to sell the return funds of solid waste projects in New Zealand. The company's solid waste business covers the whole industrial chain of incineration, catering, sanitation and hazardous waste. The production capacity at hand is about 39300 tons / day at the end of 2021, with an income of 7.671 billion yuan (year-on-year + 35.7%) in 2021, of which the incineration business is growing rapidly. 4000 tons / day is put into operation in 2021, and an additional 6600 tons / day is expected in 2022. The company intends to sell New Zealand solid waste projects, continue to return funds, and speed up asset turnover.
Profit forecast and investment advice. It is estimated that the net profit from 2022 to 2024 will be 25.0 pound 30 / 3.71 billion yuan, and the corresponding PE according to the latest closing price will be 9.58, 7.97 and 6.45 times respectively. The proportion of the company's operating business structure has increased, and the improvement of quality and efficiency has promoted the continuous improvement of ROE. Give the company a valuation of 15 times PE in 2022, with a reasonable value of 5.10 yuan per share, and maintain a "buy" rating.
Risk hint. The financing environment has tightened; production capacity has been released less than expected; and the scale of government investment has declined.