The net profit of listed companies was 81.7537 million yuan, down 34.75% from the same period last year, and the net profit after deduction was 72.4831 million yuan, down 37.45% from the same period last year. In this regard, our comments are as follows:
Main points of investment
The net profit fell 34.75%, and the epidemic and period expenses had a great impact on the company's revenue of 621 million yuan in the first three quarters of 2022, an increase of 4.29% over the same period last year. The net profit attributable to listed companies was 81.7537 million yuan, down 34.75% from the same period last year, and the net profit after deduction was 72.4831 million yuan, down 37.45% from the same period last year.
Among them, the revenue in the third quarter was 211 million yuan (+ 25.35%), the attributable net profit was 16.4839 million yuan (- 62.38%), and the non-attributable net profit was 15.153 million yuan (- 63.81%). The main reason for the slowdown in performance growth was that the progress of the project was affected by the epidemic. In the first three quarters, the company's comprehensive gross profit margin was 32.25%, down 6.69pct from the same period last year. In terms of period expenses: the sales / management / finance / R & D expense rates are 2.86%, 6.36%, 0.22%, 5.88%, respectively, and the year-on-year increase of-0.45/1.43/1.73/0.47pct, the company's period expense rate of 14.89%, year-on-year increase of 3.18pct, the decline of gross profit margin and the increase of period expense rate are the main reasons why the company's net profit growth rate is lower than that of revenue growth.
The comprehensive service provider of flue gas treatment in non-electricity industry, the winning bid laid the foundation for performance growth.
Founded in 2006, Tongxing Environmental Protection is a well-known comprehensive service provider for flue gas treatment in non-electric industries in China, mainly providing integrated ultra-low emission solutions for non-electric industrial enterprises such as iron and steel, coking, building materials, paper making and waste incineration, including dust removal, desulphurization, denitrification project general contracting and low temperature SCR denitrification catalyst. The company has the whole industry chain of flue gas treatment from process design, equipment development and manufacture, organizing construction, installation and commissioning services to the production of supporting denitrification catalysts. The company's revenue increased from 369 million yuan in 2017 to 933 million yuan in 2021, the CAGR was 26.09%, the corresponding attributable net profit also increased from 73 million yuan to 182 million yuan, and the CAGR was 25.67%. Driven by the dual-carbon policy, the demand for smoke control in the non-electricity industry continues to release, and the company has long-term development prospects. In October 2022, the company won the bid for 566m2 sintering machine flue gas desulphurization and denitrification ultra-low emission transformation BOT project, the total amount of the project is 640 million yuan, and the construction period is 427 days, which lays a foundation for the company's future performance growth.
Join hands with China University of Science and Technology to expand energy storage business and cultivate new performance growth poles while ploughing the traditional business of flue gas treatment in the non-electric industry, the company is also actively carrying out research and development of new materials and new energy technologies to cultivate new business growth poles: 1) carbon reduction business: in August 2021, the company established a "CCUS Joint Research and Development Center" with Dalian University of Technology to actively carry out research and development of carbon capture, utilization and storage technology and engineering. In 2022, the company has signed Tangshan Yannan cement kiln tail gas capture and purification food grade CO2 (dry ice) environmental protection science and technology project and power plant boiler flue gas CCUS project, which has continuously achieved breakthroughs in this business; 2) Sodium battery: in September 2022, the company signed a joint laboratory of energy storage battery materials and devices with the University of Science and Technology of China, and proposed to conduct technical research and industry-university-research cooperation on energy storage battery electrode materials such as lithium-ion battery and sodium-ion battery. Sodium ion battery has the advantages of fast charging speed, high safety and low cost, but it also has some disadvantages such as low energy density and short cycle life. it can be used in low-speed electric vehicles and energy storage. The company joined hands with Professor Yuyan of China University of Science and Technology (a well-known scholar in the field of sodium ion battery research, who has accumulated nearly 20 years of research experience and rich achievements) to enter the field of sodium ion battery, which can improve the company's technology and R & D level, speed up the company's strategic transformation, and cultivate new performance growth poles.
Profit forecast
We are optimistic that the company's environmental protection business will establish a margin of safety, and the sodium ion battery business will open up room for growth. It is estimated that the company's 2022-2024 net profit is 1.25,1.47,168 million yuan respectively, EPS is 0.95,1.12,1.27 yuan respectively, corresponding to the previous share price PE is 21,18,16 times, covering for the first time, the company is given "overweight" rating.
Risk hint
The downside risk of macro-economy, the risk of repeated epidemic situation, the risk that the demand for flue gas treatment in non-electricity industry is lower than expected, the risk of order acquisition and execution is lower than expected, the risk of sodium ion business expansion is not as expected, and so on.