Events:
The company released its annual report for 2015. revenue in 14 million increased by 29% compared with the same period last year, net profit increased by 6% in 9 million, and non-net profit-23 million decreased by 10 million compared with 14 years.
Main points of investment:
Paper business is a drag on performance: profits mainly come from government subsidies of 30 million. Affected by the relocation, the food paper is still in trial operation, with income mainly from paper products trade (0.1 per cent gross profit margin), while the main business loss is mainly due to the increase in depreciation after the increase in fixed assets (fixed assets transferred to 564 million, depreciation 11 million, management expenses 23 million).
Strong shareholder advantage: CIC has become the largest shareholder after equity transfer and non-public offering. CIC is the only environmental protection industry and investment and financing platform under the Ministry of Environmental Protection, covering central heating, sewage treatment, garbage plasma gasification and power generation, as well as technical reserves such as soil remediation and clean coal. The unique shareholder background brings many resource advantages such as policy, channel, finance and technology introduction.
The key development of Huanhui science and technology heating: hundreds of billions of waste heat central heating space driven by energy saving and emission reduction policy. The acquisition of waste heat central heating enterprise Huanhui Technology doubles its production capacity in 16 years, promising a net profit of 0.6 billion, 120 million and 200 million in 16-18 years (expected to exceed the commitment in 16 years), and the cash flow is highly profitable. The chairman of the board of directors has more than 20 years of industry experience to accelerate acquisition and integration, and position the industry leader under order expansion.
Advanced technology helps high flexibility: the introduction of German garbage plasma gasification power generation technology has the advantages of small footprint, low cost, high efficiency, resource utilization, zero emission and so on. The equipment manufacturing project of Yibin Environmental Protection Industrial Park is expected to make a profit in 16 years, bringing high performance flexibility.
Small market capitalization and large space: assuming that plasma equipment is expected to be sold, we predict that the company will achieve a net profit of 2.41,4.16,656 million yuan in 16-18 years, and 21,12,8 times PE after the completion of the corresponding issue. Government resources are still an important factor affecting the environmental protection industry for a long time, and the value difference between the 5 billion market capitalization and the resource background after the issue will bring long-term space for the company to give a "buy" rating for the first time.
Risk tips: equity change was not; restructuring will not be met; garbage plasma gasification promotion is not as expected; Wanhui technology performance is not up to promise.
