Main points of the report
Event description
Recently, the company disclosed its semi-annual report for 2016. during the reporting period, the company realized revenue of 371 million, an increase of 12.17% over the same period last year, a net profit of 13 million belonging to the parent company, an increase of 16.97% over the same period last year, and a gross profit margin of 23.07%, an increase of 0.72pct over the same period last year.
Event comment
The sewage treatment business continues to make efforts to support performance growth. During the reporting period, the company achieved revenue of 371 million, an increase of 12.17% over the same period last year, and a performance of 13 million, an increase of 16.97% over the same period last year. As can be seen from the sub-business, the company's sewage treatment business achieved revenue of 19 million, an increase of 156.58% over the same period last year, and a gross profit margin of 34%, an increase of 23.73pct over the same period last year. The company's previous technological upgrading of three existing sewage treatment plants has gradually shown its effect, with a significant decline in operating costs and a significant increase in gross profit margin. In addition, in July 2015, the company undertook the TOT project of Xinle sewage treatment Plant (90,000 tons / day), and the Chengguan Town sewage treatment Plant in Wuqing District (0.75,000 tons / day) has also completed the acceptance of civil works and equipment installation, and the sewage treatment capacity will be further improved after it is put into production.
The fixed increase has been approved, and the pace of transformation and upgrading of the company has been accelerated. Recently, the company's non-public offering plan has been examined and approved by the CSRC, and plans to acquire 55% of Ka Cheng Environmental Protection. As a regional water environment backbone enterprise, Ka Cheng Environmental Protection has excellent management team, technology accumulation, brand value and location advantages. the combination of the two will produce important synergy in business model, background resources and regional layout, which is of great significance.
Profit forecast and investment advice: we expect the company's EPS to be 0.44,0.74,0.87 yuan respectively from 2016 to 2018, with a corresponding valuation of 49x, 29x and 25x, maintaining a "buy" rating!
Risk hint: systemic risk, fixed increased risk!
