Both revenue and net profit increased, and 2Q22 performed well.
The revenue / return net profit of 1H22 overseas Chinese Bank shares was 1.914 trillion yuan, which was 3.9% compared with the same period last year, accounting for 44.1% of Huatai's annual forecast value of 45.1%, respectively. The revenue / return net profit of 2Q22 was 9.82 million yuan, and 24.4% of Huatai's net profit was + 23.6%. The company has enough orders to be executed, which will effectively ensure future performance growth.
We maintain the homing net profit forecast for 2022-2024, 3.46x457x582 million yuan, corresponding to the EPS of 0.855x1.12max 1.42. Considering that the company's ROE is higher than the industry average and the growth prospect is promising, we can enjoy a certain premium. We will give 17.9x PE in 2022 (the average PE of the reference company's consensus Wind in 2022 is 12.8x), and the target price is 15.22RMB / share (previous value: 11.90RMB / share). Maintain a "buy" rating based on 14x PE in 2022.
Focusing on the "city butler" strategy, fine management and strengthening the cost control ability benefits from the continuous increase in the number of sanitation operation projects. The 1H22 urban and rural sanitation and cleaning business income is + 22.3% to 1.852 billion yuan compared with the same period last year, and the total driving income is + 22.9% to 1.914 billion yuan last year. Excluding the 1Q21 epidemic discount, the 1H22 homing net profit is + 19.6% year-on-year, and the company is full of development momentum under the "urban housekeeper" strategy. The company is based in Guangdong, radiates the whole country, the income proportion of South China is + 0.9pp to 45.1% compared with the same period last year, and the basic market is solid. In the first half of the year, the company newly entered Shanghai and other important regions, signed 32 new projects, and expanded its business territory to 26 provinces, laying a solid foundation for the sustainable development of future performance. The company's 1H22 expense rate is 14.2%, which is 1.2% lower than that in 2021, mainly due to the effective control of sales expenses and management expenses, fine management, strengthening the ability of cost control and improving profitability.
Pending orders to ensure performance growth, optimistic that the mid-and long-term development companies of sanitation services continue to consolidate their navigational advantages. The total amount of new orders in the first half of the year reached 5.06 billion yuan (- 41.2% compared with the same period last year), accounting for 4.7% of the total new orders in the industry. The annual amount of new orders reached 620 million yuan (year-on-year-33.3%), accounting for 1.6% of the annual amount of new orders in the industry. The total amount of newly signed orders and the annualized amount are in the forefront of the industry, and the total amount of orders to be executed is nearly 55 billion yuan, + 10% compared with the same period last year, which will effectively ensure future performance growth. According to the data of the Environment Department, the total amount of new contracts for sanitation services in China by 1H22 is 108.1 billion yuan (+ 10.4% compared with the same period last year), and the new contract annualized amount is 37.8 billion yuan (+ 12.2% compared with the same period last year). The average service life is 2.9 years, which is the same as the same period last year. Under the guidance of policies such as dual-carbon targets and waste sorting, we are optimistic about the medium-and long-term development of the sanitation service industry.
Maintain a "buy" rating with a target price of 15.22 yuan
We maintain the homing net profit forecast for 2022-2024, 3.46x457x582 million yuan, corresponding to the EPS of 0.855x1.12max 1.42. Considering that the company's ROE is higher than the industry average and the growth prospect is promising, we can enjoy a certain premium. We will give 17.9x PE in 2022 (the average PE of the reference company's consensus Wind in 2022 is 12.8x), and the target price is 15.22RMB / share (previous value: 11.90RMB / share). Maintain a "buy" rating based on 14x PE in 2022.
Risk hint: the progress of sanitation marketization is not as expected, and the intensification of project competition affects the profit prospect.
