Event: in the first half of 2022, the company achieved operating income of 2.263 billion yuan, down 9.72% from the same period last year; net profit from home was 417 million yuan, down 4.80% from the same period last year; net profit from non-return was 414 million yuan, down 4.24% from the same period last year; and the weighted average ROE decreased 0.87pct to 6.06% from the same period last year.
2022H1's operating income has grown steadily, and the decline in the scale of construction has led to a decline in net profit. 2022H1 achieved revenue of 2.263 billion yuan, down 9.72%, and net profit of 417 million yuan, down 4.80%. Of this total, the operating income was 1.37 billion yuan, up 9.39%, mainly due to the increase in operating projects in the current period; the construction income was 892 million yuan, down 28.88%, mainly due to the delay in the construction of projects affected by the epidemic and the decrease in the scale of construction compared with the same period last year. The interest income was 193 million yuan, an increase of 10.13%, mainly due to the increase in contractual assets recognized as a percentage of completion and the increase in interest income recognized in accordance with the effective interest rate method with the construction of the project. 2022H1's comprehensive gross profit margin of 36.01%, with the same increase in 2.85pct, is mainly due to the decline in the proportion of construction business income with lower gross profit margin.
Remarkable achievements have been made in the expansion of automobile supply business, and projects under construction are progressing steadily. 2022H1 handled a total of 5.4954 million tons of domestic waste, with an increase of 8.25%, 2.052 billion kWh, 6.09%, 373kWh / ton, 1.688 billion kWh, 4.82%, 307kWh / ton. The company actively expanded its steam supply business, with a steam supply of 139700 tons in the first half of the year, an increase of 212.03%.
The company steadily promotes the construction of projects under construction. By the end of June 2022, the company is building projects of 6600 tons per day, of which Huludao, Shuozhou and Enshi projects are expected to be completed and put into production in the second half of the year. Huludao hazardous waste project into the operation stage, Ninghe, Jizhou and Huizhou kitchen waste projects have been basically completed, with the conditions for production.
During the period, the expense rate also increased by 0.69pct to 13.56%, and Q2 significantly saved its financial expenses in a single quarter after the issuance of convertible bonds. The expenses during the period of 2022H1 increased by 5.39% to 307 million yuan, while the financial expenses of 2022Q2 in a single quarter were 89 million yuan, down 31.70% from the previous month.
The net operating cash flow of 2022H1 also increased by 58.01% to 275 million yuan, which continued to improve with the decline of the scale under construction. The net cash flow of investment activities-573 million yuan, an increase of 37.66%. The net cash flow of fund-raising activities was 1.23 billion yuan, an increase of 661.02%.
Solid waste operation business has grown steadily, and remarkable results have been achieved in the coordinated expansion of automobile supply. From 2015 to 2021, the company's waste incineration operation capacity increased by 34%. As of 2022H1 hand production capacity, 55,000 tons / day, of which 342 million tons / day has been put into operation, 61% are under construction / construction. The company's projects are concentrated in East and South China, with significant location advantages. The company's 2021Q1-3 net interest rate also increased by 6.42pct to 33.28%, reflecting the improvement of operating profitability, mainly due to 1) debt reduction: after the fixed increase in 2020, the debt ratio was reduced to 67%, the financial pressure was reduced, and the debt ratio and financial expenses were further controlled after the issuance of convertible bonds in 2022. 2) efficiency improvement: high-quality projects drive the average tonnage to rise to 383 degrees per ton in 2021. The company actively developed solid waste collaborative business, 2022H1 steam supply increased by 212%.
Profit forecast and investment rating: according to the progress of the project construction, we maintain the homing net profit forecast for 2022-2024 of RMB 9551103 million, a year-on-year increase of 36.82%, 15.49% and 12.27%. The current market capitalization corresponds to 11,9 and 8 times of PE in 2022-2024, maintaining the "buy" rating.
Risk hint: project progress is not as expected, policy risk, financial risk, industry competition intensifies.
