Event description
Green Power Q1 achieved operating income of 1.105 billion yuan in 2022, down 5.02% from the same period last year, and the net interest rate was 181 million yuan, down 13.63% from the same period last year, deducting 179 million yuan from non-parent net profit, down 13.90% from the same period last year.
Event comment
The operation of the project led to the steady growth of operating income, and the overall income caused by the construction income affected by the epidemic decreased slightly. The total garbage inflow of subsidiaries of 2022Q1 (including joint ventures) was 2.6968 million tons, an increase of 13.74 percent over the same period last year; power generation was 1.042 billion kilowatt-hours, an increase of 14.09 percent over the same period last year, and online electricity was 863 million kilowatt-hours, an increase of 13.45 percent over the same period last year. In terms of operation quality, the online electricity per ton of garbage reached 320kWh / ton, which decreased slightly by 1 kWh / ton compared with 2021Q1 tonne, and the proportion of garbage entering the plant decreased by 9 kWh / ton, mainly due to the low utilization rate of new project capacity. The decline in revenue is mainly due to the fact that construction revenue has been affected by the epidemic, the progress of construction of projects under construction has slowed, and with the peak of the operation of waste incineration projects, construction revenue will decline in the future. however, the company confirmed that the construction gross profit margin is low (about 10%), has little impact on the profit side, and there are plenty of orders on hand.
The contribution income of short-term new projects is less, and the financial expense rate of Q1 is relatively high. According to the same calculation after retrospective, the expense rate during the 2022Q1 period of the company was 15.65%, an increase of 3.32pct over the same period last year, mainly because the financial expense rate increased from 2.68pct to 11.83% compared with the same period last year, and the management and R & D expense rate slightly increased to 3.80%. In absolute terms, the financial cost of 2022Q1 is 131 million yuan, compared with 101 million yuan in the same period last year, an increase of about 30 million yuan, an increase of nearly 30% over the same period last year. The main reason is that after the completion of the private offering at the end of 2020, the company repaid part of the loan, which made the balance of 2021Q1 loan relatively low. Compared with the end of 2021Q1, the short-term loan at the end of 2022Q1 decreased by 1.32 billion yuan and the long-term loan increased by 2.39 billion yuan, which led to the higher financial expenses of Q1 this year. It is expected that as the utilization rate of the operation project climbs and the income gradually expands, the expense rate will decrease during the period.
Abundant production capacity in hand, supporting the continued growth of the company's performance. In 2021, the company put into operation 9 new incineration projects with a total capacity of 7500 tons / day. In the second half of 2021, the second phase of Huizhou Phase II project (1700 tons / day), Jinsha project (800t / day), Dengfeng project (800t / day), Laizhou project (1000 tons / day), Jiamusi project phase II (500t / day) and fourth meeting project phase II (500t / day) were successively put into operation. By the end of 2021, the company's operating capacity of the incineration project exceeded 30,000 tons per day, an increase of 30.6% compared with the end of 2020 (266,600 tons per day). The growth rate exceeded the growth rate of Q1 online power, and there was more room for capacity climbing in the future. By the end of 2021, the company has a capacity of 4800 tons / day under construction, and about 14,000 tons / day of other planned and unbuilt projects, which is sufficient to provide a basis for subsequent sustained growth.
The company's net profit from 2022 to 2023 is expected to be 993 million yuan and 1.181 billion yuan respectively, an increase of 42% and 19% respectively over the same period last year, with a corresponding PE of 10x and 9x respectively, maintaining a "buy" rating.
Risk hint
1. The project schedule is lower than the expected risk.
2. The risk of slope retrogression by state subsidy.