Main points of investment

Next Monday (February 20), there will be an inquiry by United Water, a listed company on the motherboard.

United Water (603291): the company is a comprehensive and omni-directional water company, including tap water production and supply, sewage treatment and sewage resource reuse, municipal engineering business, and actively expand water environment treatment business such as water treatment and water ecological restoration in river and lake basins. From 2020 to 2022, the company achieved operating income of 797 million yuan / 1.041 billion yuan / 1.157 billion yuan, YOY of 16.33%, 30.50%, 11.18%, 19.06% compound annual growth rate of three years, net profit of 118 million yuan / 141 million yuan / 130 million yuan, and YOY of-13.47%, 18.66% and 7.73%, respectively. According to the preliminary forecast, the net profit of the company from January to March in 2023 will be 14.2487 million yuan to 15.9161 million yuan, an increase of 46.82% to 64.00% over the same period last year.

Investment highlights: 1, the company has regional advantages in the Yangtze River Delta and other places; in recent years, based on the domestic market, successfully entered the Southeast Asian market. The company's projects are located in the Yangtze River Delta, the Yellow River Golden Triangle and other areas. at present, it has 24 operating companies in 15 cities in 9 provinces, including Jiangsu and Hubei, with a total water operation agreement and planning capacity of about 2.26 million cubic meters per day. Among them, the company's water supply market share in Suqian City, Jiangsu Province and Xianning City, Hubei Province is 78.18% and 96.55% respectively, which has a strong regional advantage.

On this basis, the company actively opened up the Southeast Asian market with low utilization rate of water resources, and promoted the landing of the first local water PPP project in Bangladesh, with a designed water treatment capacity of 340000 cubic meters per day, which will provide water supply services to the local population of 2 million. 2. China's water supply network construction and sewage treatment still have certain development potential, with the completion of the fund-raising project, the company is expected to further enhance its capacity in the above areas. According to the data of the National Bureau of Statistics, the compound growth rate of water supply pipeline length in China from 2013 to 2020 is 6.5%. According to the relevant policy requirements of the government work report in recent years, the construction of underground pipe network is still the key area of government investment in the future. In addition, China's urban sewage treatment and industrial wastewater treatment market is still in the stage of rapid development, with a compound growth rate of 6.89% in 2002-2020 and 7.6% in 2014-2019. The company's two fund-raising construction projects aim to improve the sewage treatment capacity and the construction capacity of the water supply network, upgrading and expanding the industrial sewage treatment capacity of Jingzhou Economic and technological Development Zone from 30000 m3 / d to 52000 m3 / d, respectively, and supporting the construction of the water pipe network of the second waterworks in Suqian City, a total of 25.2km.

Comparison of listed companies in the same industry: considering the similarity of the main business, Penghao Environmental Protection, Greentown Water, Jiangnan Water, Chongqing Water, Xingrong Environment and Haitian shares are selected as comparable listed companies. From the above comparable companies, the average income in 2021 is 3.393 billion yuan, the comparable PE-TTM is 15.78X, and the sales gross profit margin is 41.66%. In comparison, the company's revenue scale and gross profit margin are in the middle and lower reaches of the same industry.

Risk hint: companies that have started the inquiry process still have the possibility of not being listed due to special reasons, the company content is mainly based on prospectuses and other public materials, and the selection of listed companies in the same industry is not accurate. Risk, content data selection may have interpretation deviation, specific listed company risk is displayed in the text content, and so on.