This report is read as follows:
At present, the company has successfully transformed the integrated environmental service provider, while the steady expansion of water + energy saving + resource utilization business, the acceleration of thermal power investment may bring performance flexibility to the company's thermal power flue gas management business.
Main points of investment:
Coverage for the first time, "overweight" rating. We predict that the company's net profit from 2022 to 2024 will be 7.2,9.1 and 1.13 billion yuan respectively, and the corresponding EPS will be 0.50,0.64,0.79 yuan respectively. The company's leading position in the smoke control industry is very stable, and at the same time, it has successfully transformed into integrated environmental service providers. While the water + energy saving + resource utilization business is steadily expanding, the acceleration of thermal power investment may bring better performance flexibility to the company's thermal power flue gas treatment business, giving the company a target price of 8.32 yuan and 53% upward space.
Fresh environment: smoke treatment leader successfully transformed into integrated environmental service provider. 1) as a technological innovation leader in the flue gas treatment industry, the company started with flue gas desulfurization business, launched exclusive SPC-3D technology when the flue gas standard was raised to ultra-low emission in the power industry, and quickly completed corner overtaking. 2) after the peak period of flue gas control in the electric power industry, the company introduced Sichuan state-owned assets to complete the mixed reform and extended the business field, and has successfully transformed the comprehensive environmental service leader of flue gas treatment + water + resources + energy saving and steady growth.
Thermal power investment speed up, the company's core smoke business is expected to re-volume. 1) it is expected that the national power supply pressure will still be large in the next three years, so it is imperative to speed up the scale of coal power support power installation. 2) from January to August 2022, national thermal power infrastructure investment totaled 48 billion yuan, a year-on-year increase of 60%.
Recently, the approval of thermal power projects has been significantly accelerated. 3) with advanced technology and rich performance, the company has a market share of more than 20% in the field of thermal power flue gas treatment, and is expected to fully benefit from the acceleration of thermal power investment. Considering that the company's thermal power project income is only less than 900 million yuan in 2021, and the guaranteed supply pressure or driving thermal power installed scale is further increased, the company's thermal power smoke control engineering business will be significantly flexible in the next three years.
Steady expansion of water + energy saving + resource utilization business. In addition to the flue gas treatment business, the company has built new sectors such as water, energy saving and carbon reduction comprehensive energy services and resource recycling. The active expansion of operating business provides the company with sound performance and high-quality cash flow.
Risk tips: thermal power investment is lower than expected, project expansion is lower than expected, commodity prices fluctuate, and so on.