Main points of investment
Upward revision of full-year results. The company issued a performance forecast and revised announcement, the 2016 annual net profit from the three quarterly reports estimated-4321murmur33.21 million yuan, after upward revision, the estimated performance is 600,000,000,000. The main reasons for the upward revision of the company's performance are as follows: the progress of the PPP project in sponge cities such as Qian'an and Suining and the better-than-expected revenue of planning, consulting and technical services in other sponge cities; 4Q company water and other environmental protection engineering business volume is better than expected; 4Q company engineering business acceptance and settlement is better.
There are broad prospects for the treatment of water environment, and professional environmental protection companies have made great achievements. In the PPP project library of the Ministry of Finance, the water environment is the main force of environmental protection PPP, such as large market capacity and close binding with investment. Comprehensive environmental protection PPP requires participating enterprises to have strong technology research and development-system integration capabilities, and after completion, enterprises need to have higher operating capabilities to meet the needs of the government in the operating cycle according to performance assessment and payment, which is not a pure engineering concept. Therefore, after the water environment PPP market is opened, for professional environmental protection companies with advantages such as technology integration, the competitive advantage and order-taking ability will not be weakened, but will be strengthened.
The assessment time is approaching, and the construction of sponge and black smelly PPP is accelerated. In the environmental protection PPP project, the sponge project has obvious advantages in policy support, order enforceability, project profitability, government payback guarantee and so on. Considering that the assessment nodes of the first batch of pilot cities will be ushered in at the end of 2017, the investment and construction work of these cities will undoubtedly be accelerated accordingly; judging from the progress of bidding, the accumulation of experience has significantly accelerated the bidding work of the second batch of pilot cities. Among them, Yuxi and Sanya have completed tendering, and Zhuhai, Fuzhou, Qingdao and other cities are actively promoting.
From the perspective of project release rhythm, the approaching assessment and mechanism innovation will significantly accelerate the release of sponge and black smelly PPP orders in 2017, the intensive landing of projects and the acceleration of governance will run through the whole year, and the investment peak will be determined. Considering that the company has outstanding advantages and is rich in receiving orders, it is worth laying out in the medium and long term.
Accelerate the business layout and improve the industrial chain, and the performance inflection point is coming. Relying on the competitive advantages of technology, management, resources and investment and financing capabilities, the company will continue to promote the acquisition of sponges and black smelly orders, and build a listing platform with planning and design, investment, construction and operation of the whole industry chain. In addition, the company is also planning intelligent drainage, soil remediation and other emerging environmental protection to make a difference, improve the industrial chain and contribute to the creation of new profits. At present, the company is actively using industrial funds, Dingzeng and other channels to raise development funds, and the participation of a large proportion of major shareholders and related parties will show confidence in development. The company is tracking a large number of projects, and has obtained sponge PPP projects such as Qian'an, Suining and Yuxi, totaling about 3.5 billion yuan. The above projects are expected to start on a large scale in 2017.
Risk hint. Uncertainty of the progress of additional issuance, uncertainty of bidding and construction schedule of PPP project in Sponge City, etc.
Maintain a "buy" rating. Downgrade 2016 Muhami 2018 EPS forecast to 0.01 pound 0.18Unip 0.29 yuan (considering additional issuance to be completed in 2017), the current share price corresponding to Pamp E is 820-43-27 times. The core points of the company are: (1) the company has outstanding advantages in the most critical planning and design links in the sponge city, and has the scarcity or even uniqueness of the investment target; (2) it is expected to become an important layout of the environmental protection strategy of the cleaning and control department, and the follow-up continuous integration is worth looking forward to; (3) the order is abundant and the large-scale construction period has arrived, and the performance inflection point is coming; (4) the potential value of Pingshan land is outstanding to provide important safety marginal support. Taking into account the above factors, we maintain the target price of 11.30 yuan and the "buy" rating.