Event: in the third quarter of 2022, the company achieved operating income of 5.273 billion yuan, down 22.05% from the same period last year; net profit from home was 2.395 billion yuan, up 381.75% from the same period last year; and net profit from non-return was 498 million yuan, up 7.23% from the same period last year. In the first three quarters of 2022, the company realized operating income of 15.198 billion yuan, down 2. 83% from the same period last year. 83%; realized net profit of 3.252 billion yuan, an increase of 66.04% over the same period last year; and realized net profit of 1.241 billion yuan, an increase of 1.15% over the same period last year.
Comments:
The delivery of illiquid assets has been completed, and the business layout of the multi-industry chain has been completed. In the third quarter, the company completed the sale of New Zealand Company, Huizhou Chuangchuang Water Co., Ltd. and Yiyang Chuangchuang Water Co., Ltd., in which the investment income generated by the sale of the New Zealand company was about 2.498 billion yuan (at the exchange rate on the delivery date). The impact on the net profit of returning home is about 1.796 billion yuan, the company's cash flow level continues to improve, while the asset-liability ratio has declined. In addition, the company continues to promote the acquisition of equity in the first atmosphere in accordance with the agreement, and as of October 29, the company has held 99.99% of the shares of the first atmosphere. At this point, the company has initially constructed the business layout of the "water, solid, gas, energy" multi-industry chain and has the ability to solve the comprehensive environmental governance needs of customers.
The operation capacity of water and solid has improved steadily, and the profit of superimposed technical transformation in the operation of new capacity has been enhanced. The company's urban water business has formed a national business layout, as of the first half of the year, water treatment capacity reached 2518.63 million tons per day, ranking in the forefront of the domestic water industry. On the other hand, the solid waste sector has benefited from the continuous and steady growth of factors such as the increase in re-trade projects, the increase in electricity generation per ton, and the price adjustment of waste. In addition, six new projects with a total of 4200 tons per day in the first half of the year were approved by commercial operation, and the company's business scale continued to expand as the new production capacity was put into operation one after another. In addition, for the stock project, the company has obvious cost reduction and efficiency effect through technical transformation, garbage quality improvement, fine management and "one enterprise, one policy" and other methods, and the profitability has been significantly improved compared with the same period last year.
The reserve of project resources is sufficient, and low-cost diversified financing contributes to the long-term development. The company's project reserve is relatively sufficient, and in September it successively announced foreign investment in the relocation project of Chengnan sewage treatment plant in Sihong County, Suqian City, Jiangsu Province (phase I) PPP project (TOT mode), and the new industrial sewage treatment plant project of Jinqiao Economic and technological Development Zone in Hohhot, Inner Mongolia Autonomous region (BOT mode), with a total scale of 100,000 tons / day and 30,000 tons / day sewage treatment capacity respectively.
According to the company announcement, the company raised a total of 31.3 billion yuan from 2016 to the first half of 2022, with an average interest rate of about 3.89%, lower than the benchmark lending rate for the same period. As the only product in the first batch of pilot public offering REITs based on sewage treatment infrastructure, REIT was widely recognized by the market and topped the list of the first nine public offerings REITs with an increase of nearly 40 per cent in the year since its launch.
Maintain the "buy" rating: with the steady progress of the company's water business and the rapid development of solid waste business, the company's sustained growth has been guaranteed, and the issuance of REITs will effectively invigorate the existing assets, the company's valuation is expected to increase, optimistic about the company's future growth. The company's revenue from 2022 to 2024 is expected to be 262.96 yuan, 300.54 yuan and 35.584 billion yuan respectively, up 18.28%, 14.29% and 18.40% respectively over the same period last year, and the net profit of returning home is 24.12,28.22 and 3.341 billion yuan respectively, up 11.32%, 21.71% and 21.66% respectively over the same period last year. The EPS was 0.335 yuan, 0.38 yuan and 0.46 yuan respectively, and the corresponding PE was 8.1,6.9,5.9 times, respectively.
Risk tips: policy promotion is not as expected, macro-economy is falling faster than expected, market competition is intensified, and the progress of project promotion is not as expected.