Main points of investment
The company announced 22H1 results: revenue rose 17.3% year-on-year to 870 million yuan, gross profit increased 9.2% to 490 million yuan, operating profit increased 4.5% to 350 million yuan, and homed net profit was 250 million yuan, down 6.0% from the same period last year.
Our comments are as follows: excluding the impact of listing fees, the company's return net profit is 270 million yuan, an increase of 1.0% over the same period last year.
The amount of industrial solid waste disposal maintained a high growth, with an increase of 44.4% over the same period last year and 9.1% month-on-month, mainly due to the contribution of Anhui and Sichuan Guangyuan production projects. The disposal volume increased and diluted the disposal cost, the disposal cost per ton decreased by 23 yuan, and the gross profit per ton increased by 13 yuan to 196 yuan compared with the same period last year. In the second half of the year, emphasis will be placed on expanding the sludge drying project.
In the first half of the year, the production of waste was insufficient, the logistics was blocked, the demand was sluggish, the industry of hazardous waste disposal hit bottom, and the company's industrial hazardous waste disposal volume was stable. In the first half of the year, the industrial hazardous waste disposal volume increased by 23.3% to 406000 tons over the same period last year, with an additional contracted capacity of 736000 tons. The company added 2033 new customers in the first half of the year; at the same time, it made every effort to promote inter-provincial transfer business, and the number of transshipment contracts increased compared with the same period last year. In the first half of the year, the unit price of industrial hazardous waste tons fell by 203yuan to 1433 yuan, the cost per ton rose 77 yuan to 659 yuan compared with the same period last year, and the gross profit per ton decreased by 280 yuan to 774 yuan.
1) the disposal volume of general hazardous waste business in the first half of the year was 338000 tons, the disposal price per ton dropped to 1469 yuan, the newly put into operation capacity was 530000 tons, and the newly contracted capacity was 400000 tons, supporting the volume in the second half of the year. The company has customized the price adjustment mechanism of solid and dangerous waste, will adopt differentiated marketing strategies to improve the average price of disposal, and continue to reduce costs and increase efficiency.
2) with the upgrading of the sludge business process, the cost per ton has been greatly reduced to 555 yuan, so pay close attention to the layout of the national territory. The amount of sludge disposed of in the first half of the year was 45000 tons and the gross profit per ton was 662 yuan. The Zhoushan project in Zhejiang will be acquired again in the first half of the year, with an annual production capacity of 36000 tons to supplement the blank market in Zhejiang, and will focus on the blank market in the northeast and southwest in the second half of the year.
3) the unit price of fly ash tons rose to 1329 yuan over the same period last year. In the first half of the year, the disposal volume of fly ash was 22000 tons; the cost per ton increased significantly to 1574 yuan, mainly due to the weakening of dilution effect of volume and the increase of transportation cost; the gross profit per ton lost 245 yuan.
The three fees are stable. H1 has a net operating cash flow of 240 million yuan and a book cash of 660 million yuan.
The cement kiln will cooperate with Gezhouba to strengthen the market layout in Hubei and speed up the docking in the second half of the year.
Our point of view: the catalytic pattern of the epidemic is iterative, the traditional competitors are declining, the price of hazardous waste disposal has hit bottom, and the collaborative disposal of cement kiln will continue to quickly replace the traditional harmless disposal. The conch is in the lead in environmental protection technology and resources, and has the vitality of private enterprises. It is still in the period of rapid growth in obtaining projects and releasing production capacity. The planned amount of hazardous waste disposal in 2022 is 1 million tons +, and the annual growth of hazardous waste disposal is expected to be 20% in the next 3-4 years. The boom and valuation are expected to reverse, and Anhui Conch Cement holding Conch Environmental Protection has also dispelled the market's hidden worries about the distribution of long-term benefits. We adjusted the company's profit forecast and expected the company's annual return net profit in 22-23-24 to be RMB 970 million, respectively, which was + 14.5%, 46.6% and 37.5% respectively compared with the same period last year, and was upgraded to the "buy" rating. The company entered Hong Kong Stock Connect on September 5, with a target price of HK $12.25, which corresponds to 20 times the PE of the forecast EPS in 2023.
Risk hints: the epidemic repeatedly affects enterprise production and waste and inter-provincial transportation, project construction is not as expected, payback is not expected, market competition is intensified, potential environmental risks.