The location advantage is obvious and the water chain is expanding steadily.
1) Water supply business: the company is the only supplier of Luan water diversion from Luan River in Tianjin Binhai New area, with monopoly barriers and obvious location advantages. Water supply business continues to contribute high quality and stable profits to the company, and the newly signed order will further increase the performance. 2) sewage treatment business: projects under construction have been put into production one after another, the sewage treatment capacity has increased rapidly, and the project area has been expanded from North China to the whole country. In the future, with the huge market space and flexible business model for water treatment, sewage business may become a new profit growth point for the company. At the same time, the rapid development of Binhai New area and the promotion of Beijing-Tianjin-Hebei integration strategy will bring additional growth opportunities for the company.
Acquisition of Jiacheng Environmental Protection, "Operation + Technology + Engineering" for industrial layout
Jiacheng Environmental Protection is a leading environmental protection enterprise in Hebei Province, with a good reputation and complete qualifications; has 8 franchises and numerous achievements in North China; has an independent R & D team and strong technical strength. In the future, the two companies will form good coordination: 1) most of the customer resources of Jiacheng Environmental Protection are concentrated in Hebei, while Bohai shares have a strong market advantage in Tianjin. The integration of the two will help the company to obtain more project opportunities in the context of Beijing-Tianjin-Hebei integration. 2) Jiacheng Environmental Protection has "technical strength", "engineering qualification" and "operational experience". After the completion of the merger and acquisition, the business structure of Bohai shares based on water supply services will be strongly supplemented, and the scale of revenue and profits is expected to increase rapidly.
With the help of PPP project boom, ushered in the rapid growth of performance
Under the background of high-density landing of relevant policies, the government has made unprecedented efforts to promote PPP projects. by the end of September 16, the Ministry of Finance has imported 10471 PPP projects, with a total investment of 12.46 trillion, and the landing rate has increased steadily. The company has recently won bids for two PPP projects in Shahe City and Lulong County, achieving a major breakthrough. It is expected that after the completion of the merger and acquisition of Jiacheng Environmental Protection, with the strength of "operation + engineering + technology" and the background of state-owned assets of the controlling shareholder, high performance growth is expected.
With the help of capital operation, the industrial investment holding group company plans to acquire Jiacheng environmental protection to expand the sewage treatment business; set up an environmental protection industry fund to invest and cultivate the high quality target of the environmental protection industry chain; join hands with South University of Science and Technology to set up a research institute to promote the combination of universities and enterprises and the transformation of scientific and technological achievements. Futianhe in the capital increase, initially involved in the field of pension, the continuous expansion of business coverage areas, areas and scale, highlighting the company's ability to operate capital, as well as the determination to optimize and adjust the industrial structure. With the help of the company's state-owned enterprise background and the flexibility of capital operation, it is worth looking forward to developing into a large-scale industrial investment holding group in Beijing-Tianjin-Hebei region.
First coverage to give a buy rating
The company has unique geographical advantages, the water business will maintain steady growth; after the merger and acquisition of Jiacheng Environmental Protection, the business field has been greatly expanded; the PPP project boom has brought rapid growth opportunities; and the goal of building an industrial holding platform with the help of capital operation is clear. We estimate that the company's operating income from 2016 to 2018 will be 8.10,17.07 and 2.04 billion yuan respectively, and its net profit will be 0.61,1.68 and 207 million yuan respectively, equivalent to 0.24,0.67 and 0.82 yuan EPS respectively.