Revenue growth of 17.8%, maintaining "buy" rating
In 2021, overseas Chinese Bank shares realized a revenue / return net profit of 33320.255 million yuan, compared with the same period last year, which was + 17.8% and 32.1%, and the return net profit was lower than Huatai's expected 33.6% (expected: 384 million yuan). 1Q22 revenue / return net profit is 932 million yuan / 77.2 million yuan, which is 11.1% compared with the same period last year. We estimate that the net return profit from 2022 to 2024 will be 346 million RMB 457,000,000 yuan, corresponding to EPS 1.52 million yuan per share. Considering that the company's ROE is higher than the industry average and the growth prospect is promising, we can enjoy a certain premium, giving 14x PE in 2022 (reference to comparable companies with an average PE of 9.9x in 2022) and a target price of 11.90 yuan per share (previous value: 18.80 yuan per share, based on 2021 20x PE). Maintain a "buy" rating.
The business territory is expanding and the gross profit margin continues to rise.
Benefiting from the continuous increase in the number of sanitation operation projects, urban and rural sanitation and cleaning business revenue in 2021 was + 18.1% to 3.233 billion yuan compared with the same period last year, driving total revenue from + 17.8% to 3.332 billion yuan. The comprehensive gross profit margin is 24.2% (year-on-year + 0.3pp), which demonstrates the company's effective cost control under the "city butler" strategy. The company is based in Guangdong and radiates the whole country. in 2021, the company project has covered more than 80 cities across the country, and the business territory has been expanded to 26 provinces, laying a solid foundation for the sustainable development of future performance. The proportion of income in South China is-5.9pp to 44.2% compared with the same period last year, and the income structure continues to be optimized. The net interest rate of homing in 2021 was 7.6%, compared with the same period last year-6.8pp, mainly due to the cancellation of preferential policies for the epidemic in 2021 and the increase in the rate of management expenses and financial expenses.
The order of the sanitation service industry reached a new high, and the winning bid amount of the company ranked first in the industry.
According to the statistics of the Department of the Environment, in 2021, there were 20535 sanitation service projects / bid sections nationwide, with an annual total value of 71.5 billion yuan and a total contract value of 216.2 billion yuan. The total amount of bid opening projects and annual total amount reached a record high. The company's leading advantage continues to highlight, the annual bid-winning total reached 19.038 billion yuan, the new annual service amount reached 1.418 billion yuan, the total bid-winning amount and the new annual service amount both ranked first in the industry. Since 2022, the company has won a number of projects, including 2.257 billion yuan for comprehensive urban and rural garbage disposal franchise project in Yangcheng County, which can effectively ensure future performance.
Maintain a "buy" rating with a target price of 11.90 yuan
Taking into account the rising labor and material costs, upward management expenses and interest expenses on convertible bonds, we downgrade the company's gross profit margin forecast, raise the management expense rate and financial expense rate forecast, and then lower the 2022-2023 net profit forecast to 346,000,000 yuan (former value: 505pm 675 million yuan), introduce 2024 return net profit of 582 million yuan, refer to the comparable company's 2022 Wind consensus forecast PE average 9.9x Give the company 14x PE in 2022 with a target price of 11.90 yuan per share and maintain a "buy" rating.
Risk hint: the progress of sanitation marketization is not as expected, and the intensification of project competition affects the profit prospect.