The decline in performance was affected by GF Securities Co., LTD. 's performance, and all the main businesses developed in line with expectations.
The company released its three-quarter report for 2016, with operating revenue of 1.004 billion, down 14.25% from the same period last year, and net profit of 729 million, down 39.77% from the same period last year. Changes in income and net profit were in line with expectations. The decline in revenue is mainly due to the reduction of water dispatching and water sales due to the impact of climate; 2) the impact of the increase in revenue. The reason for the decline in net profit compared with the same period last year is mainly due to the decrease in investment income on GF Securities Co., LTD.. The net cash flow of business activities was 286 million in the third quarter, an increase of 33.99% over the same period last year, mainly due to the increase in cash received from the sale of goods and services and the decrease in cash paid for goods and services.
In August, the sewage PPP project of Huangpu Town, Zhongshan City was signed to fill the gap of the company.
The company signed "Zhongshan Huangpu Town sewage treatment plant network integration PPP project franchise agreement", the project investment amount of 263 million, the total planning of 100000 tons, composed of TOT and BOT parts, the cooperation period is 25 years, the unit price of sewage treatment service fee is 1.726 yuan / cubic meter. The project thickens the company's performance, helps to promote the "sewage chess game" in Zhongshan City, and accumulates experience and fills the gap for the company's first PPP project, which helps the company to expand other sewage PPP projects and open up more market space.
Progress has been made in water affairs, agricultural trade, agricultural approval market, waste incineration and passenger transport business.
1) at present, the company's designed daily water supply capacity is 2.35 million cubic meters, and the designed daily sewage is 610000 cubic meters. The total water supply accounts for 80% of Zhongshan City and 50% of Jining; the total sewage accounts for 35% of Zhongshan City and 60% of Jining City, and the water charge is expected to be raised. 2) the agricultural trade and agricultural batch market business already has 31 comprehensive farmers' markets, 9000 merchants, covering 18 towns, and the wholesale business accounts for 70% of the city's total, with an annual transaction volume of more than 3 billion. And the transformation to the market management model of "actively cultivating business formats and developing with customers"; 3) Tianyi energy waste incineration project has a daily generating capacity of more than 140,000 kilowatt-hours, with an annual income increase of about 6000 million. 4) passenger services to the Hong Kong Airport, there is a check-in service, so there is a certain increase in group passengers.
Follow-up priority work
1) there is still room for the integration of sewage projects, focusing on the local Zhongshan City; 2) Tianyi Energy started Phase II, making preparations for the company to build new projects independently; 3) looking for high-quality targets and strengthening project communication, the direction is sewage, solid waste, hazardous waste, kitchen waste and other environmental protection areas; 4) focus on participating in PPP to strengthen ties with local governments.
All the main businesses of Zhongshan Public Service have been developed and have been given a rating of "increasing holdings".
The company has actively developed its main business, and has made progress in water supply, sewage, agricultural approval market business, garbage incineration, passenger transport service business, etc., and through the acquisition of engineering capacity, the company has continuously moved forward to a comprehensive environmental service provider and reduced its dependence on investment income. At the same time, the company is also actively promoting the equity incentive mechanism to provide staff enthusiasm for work. We give Zhongshan Public "overweight" rating, and it is estimated that the EPS will be 0.67 cash 0.74 / 0.82 yuan in 2016-2018.
Risk hint: there is a risk of performance fluctuation caused by a large proportion of investment income.