This report is read as follows:
Under the influence of the strengthening of sewage treatment and atmospheric treatment, the demand for Roots blower will hit bottom and pick up. The company's environmental protection products have entered the fast lane of development.
Main points of investment:
Under the influence of the strengthening of sewage treatment and atmospheric treatment, the demand for Roots blower will hit bottom and pick up. Roots blower is under the influence of downstream industrial demand, and the proportion of environmental protection business will be greatly increased. It is expected that the proportion of downstream environmental protection of Roots blower will increase from 13% to nearly 40% in 13 years. The company's environmental protection products have entered the fast track of development.
The recent rapid growth of sewage treatment orders is sustainable, and the strict policy on sewage disposal will effectively drive the medium-and long-term demand. Orders for blowers for sewage treatment increased rapidly in the second quarter, and the year-on-year growth rate is expected to exceed 50%. We believe that the recent sharp increase in orders is due to (1) the initial results of strict investigation of sewage theft in some areas, and (2) the launch of new products and the strengthening of sales in this field. We believe that the current is only the starting point for the rapid growth of the company's sewage treatment fans. At the industry level, the allocation of sewage treatment equipment generally corresponds to the sewage discharge reported by enterprises. Nearly 20 billion tons of sewage are secretly discharged in China every year, which is equivalent to the current sewage treatment capacity. If the more stringent regulation of sewage theft discharge policy is introduced, it will obviously promote the configuration rate and upgrading of the blower, and the market capacity will be doubled. At the company level, the company has a market share of nearly 50% in the field of sewage treatment, with a first-mover advantage. The continuous development and launch of new products in this field will help to steadily increase the market share.
With the enhancement of atmospheric control, it is expected that the demand for desulphurization fans will restart. In the second quarter, the company's desulphurization fan order has shown signs of starting. Recently, the State Council has put forward ten specific measures to strengthen atmospheric control, and the new deal brings desulfurization market space equal to twice that of the original plan of the 12th five-year Plan. The renewal and heightening of the desulfurization tower will increase the requirements for the number and efficiency of fans, and it is expected that the high-pressure wind with higher price in the future will be the main demand.
Profit forecast and investment rating: the company's EPS in 13-15 is expected to be 0.3,0.4,0.52 yuan respectively. At present, the PE of environmental protection companies in 13 years is close to 40 times, conservatively according to 30 times PE in 13 years, with a target price of 9 yuan.