Event: the company issued a half-yearly results announcement for 2022. In the first half of the year, the company achieved revenue of 2.263 billion yuan, down 9.72% from the same period last year, and the net profit belonging to shareholders of listed companies was 417 million yuan, down 4.80% from the same period last year.
Comments:
Revenue from 2022H1 construction services declined, while 2022Q2's performance increased. In the first half of the year, the revenue from waste disposal and power generation business was 1.128 billion yuan, up 8.80% from the same period last year; the revenue from construction services was 892 million yuan, down 28.88% from the same period last year, mainly due to the delay in the construction of some projects under construction due to the epidemic of COVID-19. And the number and scale of projects under construction in the current period decreased. In a single quarter, 2022Q2 achieved revenue of 1.157 billion yuan, down 13.78% from the same period last year, and realized net profit of 236 million yuan, an increase of 3.31% over the same period last year.
2022H1 waste disposal and power generation business revenue share increased, the company's profitability has improved.
2022H1, the company's gross profit margin was 36.01%, an increase of 2.85% over the same period last year, mainly due to an increase in the share of revenue from waste disposal and power generation businesses with higher gross margins. Of the two major businesses, the gross profit margin of waste disposal and power generation business in the first half of the year was 47.07%, the proportion of revenue was 49.85%, an increase of 8.48 percentage points over the same period last year; the gross profit margin of construction services was 7.81%, and the proportion of revenue was 39.43%, a decrease of 10.63 percentage points over the same period last year. 2022H1, the company's net interest rate is 19.27%, an increase of 0.88% over the same period last year, and its profitability has improved.
The company's revenue from waste disposal and power generation is expected to increase. As of June 30, 2022, the company has operated 31 projects in the field of domestic waste incineration and power generation, with a waste disposal capacity of 34000 tons per day, and 6 projects under construction. Huludao power generation project, Shuozhou project, Enshi project, Ninghe kitchen waste disposal project, Jizhou kitchen waste disposal project and Huizhou three-in-one project are expected to be put into production in the second half of the year, and new capacity is expected to be released. At present, the company makes full use of its capacity, and the utilization rate of capacity in 2021 is about 95%. With the release of new capacity, the company's revenue from waste disposal and power generation is expected to increase.
The company actively carries out new business such as steam heating and kitchen waste disposal, and is expected to expand its source of income.
The company actively expanded the steam heating business. Pingyang Project, Rushan Project and Jiamusi Project successfully expanded the steam heating business. The total steam supply of 2022H1 Company was 139700 tons, an increase of 212.03% over the same period last year.
In addition, in 2021, the company won Shantou Chaoyang Kitchen waste disposal Project and Tianjin Ninghe Kitchen waste disposal Project. By the end of 2021, the company has obtained 8 kitchen waste disposal projects to achieve business coordination with domestic waste incineration power generation projects.
Investment advice: maintain cautious recommended ratings. It is estimated that from 2022 to 2024, the EPS of the company will be 0.71,0.76,0.81 yuan respectively, and the corresponding PE will be 10 times, 10 times and 9 times respectively, maintaining a cautious recommendation rating.
Risk hints: policy promotion is not as expected; macroeconomic development is not as expected; construction progress of waste incineration power generation projects is not as expected.