Items:
The company signed the "Asset purchase Agreement" on the acquisition of Jiangsu Yongbao Environmental Protection Technology Co., Ltd., and intends to acquire 100% equity in Yongbao with cash to enter the hazardous waste treatment industry.
In addition, the major asset restructuring plan planned by the company suspended from trading was terminated because it could not reach an agreement within a limited time. The company resumed trading on the 12th.
Comments:
There is no loss for the company to acquire high-quality and hazardous waste enterprises in Jiangsu, enter into hazardous waste disposal, and further improve the layout of the company to terminate the major asset restructuring plan. however, the acquisition of Jiangsu Yongbao Technology established during the suspension period will bring new high-prosperity business areas and performance contributions to the company, which will be beneficial to the future development of the company.
The company announced on June 29 that it signed a framework agreement on the acquisition of Jiangsu Yongbao Environmental Protection Technology Co., Ltd., and plans to implement the formal equity transfer agreement before September 30. Due to the strong willingness of the two sides to cooperate and the smooth negotiations, the Asset purchase Agreement was launched in less than two weeks. Yongbao's overall price is 580 million yuan, divided into two cash acquisitions, this time the first acquisition of 70% of the equity, the price of 385 million yuan, the remaining 30% of the 2019 transaction.
Yongbao achieved operating income of 78 million yuan and net profit of 31 million yuan in 2016, and revenue of 36 million yuan and net profit of 19 million yuan from January to May 2017.
Always maintain excellent profitability and rapid growth. Always keep the environmental protection promise that the net profit will not be less than 45 million yuan in 2017 and no less than 55 million yuan in 2018, corresponding to 13 times the purchase market ratio in 2017.
Yongbao Environmental Protection of this acquisition has participated in the construction of the national 863 science and technology major project "bulk industrial solid waste treatment and resource utilization technology and demonstration", and the fully automatic harmless disposal technology of waste cutting fluid is in a leading position in the industry. at the same time, it has mastered a full set of technological process for harmless disposal and comprehensive utilization of metal surface treatment waste liquid, aluminum sludge and other wastes. Shunbang Transportation, a wholly-owned subsidiary, provides point-to-point hazardous waste transfer transport business and has a professional hazardous waste collection system.
The output of hazardous waste in Jiangsu area is high, the treatment gap is large, and the disposal cost is high. The successful completion of Yongbao's acquisition will enable the company to obtain the ability to deal with hazardous waste, expand the environmental governance industry chain, and further improve the strategic layout of the company's comprehensive environmental service providers. At the same time, Yongbao's high performance commitment will effectively thicken the company's performance.
PPP has rich orders and strong financing ability to help the project land.
Since June, the company has continuously landed large-scale PPP framework agreements, and successively signed strategic cooperation agreements with Henan Yexian Government (local government), Henan Water Conservancy first Bureau (state-owned enterprises) and Henan Water Conservancy Investment Group (state-owned enterprises, with a total investment of about 20 billion yuan), showing the company's strong government relations and resource strength.
Among them, Henan Water Conservancy Investment Group is the largest water conservancy investment enterprise in Henan, which integrates other state-owned operating assets of water conservancy as its registered capital on the basis of provincial assets of five major reservoirs and five major irrigation districts, and is committed to becoming a first-class water resources industry investment group in China. After the country has established the development strategy of sponge city, Henan Water Conservancy Investment Group will increase investment in the whole province to promote the construction of sponge city in the whole province. The two sides will jointly initiate the establishment of an industrial fund for water ecology and water environment, which will be invested in the stock of Henan Water Conservancy Investment Group and the newly-built PPP project, and can also cooperate to undertake PPP projects in the Henan market. The investment amount of the bilateral cooperation project is estimated to be about 20 billion yuan. One or two projects will be selected as pilot cooperation in advance, and it is expected that they will be able to land soon.
The controlling shareholder of the company has a strong financing ability, which helps the PPP project to land quickly. In January, 2017, Science and Technology Environment signed a comprehensive strategic cooperation agreement with Jiangsu Bank Co., Ltd. Xuzhou Branch, and Jiangsu Bank gave the company an intentional comprehensive financing quota of 5 billion yuan in the five years from 2017 to 2021. On October 25, 2016, launched by Fengli Fortune (Beijing) International Capital Management Co., Ltd., the Fengli Fortune Environmental Protection Industry M & A Fund project with an investment of more than 1 billion yuan was successfully signed. In March 2017, the company announced that it plans to jointly set up an industrial investment fund with a total size of 2 billion yuan with Shenzhen Qianhai Qinzhi International Capital Management Co., Ltd., to invest in M & An and PPP of environmental protection industry.
Profit forecast and rating
After the change of corporate control, deeply sort out the company's business and management, make clear the development direction, vigorously expand the company's business, and improve employee incentives at the same time. The company completed the first phase of the equity incentive plan in March 2017, granting 12.68 million shares to 182 people at a price of 7.53 yuan to rally the internal strength of the company. The plan to increase holdings was announced in April, with a ceiling of 15 yuan per share, nearly twice the current share price, and a ceiling of 1 billion yuan, accounting for 15.75% of the company's total market capitalization.
Increasing holdings binds the interests of management to the performance of the company, showing the confidence of management.
Company Nirvana rebirth, incentives in place, is expected to rely on strong capital operation capacity and social resources, to help PPP order acquisition and company extension expansion. We estimate that the net profit attributable to the company in 17-19 will be 1.66 pounds 2.40 / 321 million yuan respectively. Before the suspension of trading, the company's stock price pulls back more, the acquisition is good, and senior executives plan to increase their holdings. It is suggested that they should pay active attention to maintain the "buy" rating.
