Company announcement: on August 20, the company signed the "Cooperation Agreement on Water supply Construction Project in 100 towns of Heilongjiang Province" with the Department of Housing and Urban-Rural Construction of Heilongjiang Province, which stipulated that the company would set up a subsidiary company in Heilongjiang, and take this as the main body to provide planning and consulting services for water supply and drainage projects to villages and towns within the scope of cooperation, and to invest, construct, operate and manage the project.
The feasibility of the new order is obviously stronger than that of the Shandong project, and the model of rural water affairs is gradually becoming mature. The Heilongjiang Rural Water Affairs Framework Agreement is another major regional contract for the company after the Shandong project, but it is obviously more feasible than the Shandong project, which is mainly reflected in: l (1) supporting landing projects: this agreement is in addition to the overall framework at the provincial level. It is also required to ensure that the water supply and drainage projects of not less than 3-5 demonstration towns selected by the company are provided to the company within two months after signing as the first batch of cooperative projects between the two sides. L (2) exclusivity: it is agreed that after the signing of the contract, the local government must provide all kinds of support work for the company to carry out the project, in particular, it requires that either party should not communicate with a third party on the projects agreed within the scope of the agreement; l (3) schedule agreement: it is clear that the construction of the first batch of cooperative projects will be completed in 2014 and ensure smooth operation. L (4) model agreement: it is determined to give priority to DBOT in township water supply projects and BT+O in sewage treatment projects; l (5) Investment scale agreement: the company is required to invest not less than 5 billion yuan in the next five years. According to the ROE calculation of 10% of the water industry, the annual profit will reach 100 million yuan. On the whole, the feasibility of this agreement is obviously stronger than that of the Shandong project, indicating that the company's mode of rural water operation is gradually becoming mature.
Maintain the "overweight" rating. We have recently emphasized that the company (1) order catalysis (2) the transformation of environmental protection platform companies (3) further motivate the three catalysts after the equity has been straightened out. At present, order catalysis has begun to be fulfilled, considering that the specific contract in Heilongjiang has not yet been signed, and will not raise the profit forecast for the time being based on conservative principles, maintaining earnings per share of 0.15 yuan 0.21 yuan per share in 2014-2015, corresponding to 3928 times PE in 2014-2015. It should be emphasized that if rural water projects are put in place in the future, the company's performance will be adjusted upward with great flexibility, and the "overweight" rating will be maintained temporarily.
