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The company released the report for the third quarter of 2017
Bohai Co., Ltd. released its report for the third quarter of 2017, achieving revenue of 1.14 billion yuan, an increase of 103.00% over the previous year, and achieving net profit of 67.17 million yuan, an increase of 109.70% over the previous year. Among them, revenue for the third quarter reached 480 million yuan, an increase of 147.18% over the previous year, and Guimu's net profit reached 37.82 million yuan, an increase of 97.65% over the previous year.
Brief review
Kacheng Environmental Protection's combined performance boosts performance
The company released a report for the third quarter of 2017. It achieved revenue of 1.14 billion yuan in the first three quarters, an increase of 103.00% over the previous year, and achieved net profit of 67.17 million yuan, an increase of 109.70% over the previous year. Among them, the third quarter's single-quarter revenue reached 480 million yuan, an increase of 147.18% over the previous year, and Guimu's net profit reached 37.82 million yuan, an increase of 97.65% over the previous year. The company completed the acquisition of 55% of Kacheng Environmental's shares in January 2017. Kacheng Environmental was included in the scope of the consolidated report, which contributed to rapid growth in the company's performance in the first three quarters.
At the end of the reporting period, accounts receivable and accounts payable increased by 161.92% and 89.29% respectively compared to the beginning of the period, mainly due to the completion of the acquisition of Kacheng Environmental Protection and the expansion of the scope of consolidated statements. Advance payments and advance payments at the end of the reporting period increased 5890.94% and 291.79% respectively from the beginning of the period. In addition to the combined contribution of Kacheng Environmental Protection, the increase in advance project payments received by other subsidiaries also led to a sharp rise in advance payments. Furthermore, the increase in subsidiary projects led to a 33.03% increase in the number of projects under construction.
The profit scale was greatly increased by completing the merger and acquisition of Kacheng Environmental Protection. Jiacheng Environmental Protection is a leading environmental protection enterprise in Hebei Province. It is extremely competitive in the field of sewage treatment. It strongly complements Bohai Co., Ltd.'s business structure, which mainly focuses on water supply services, and forms an “operation+technology+engineering” system in the industrial layout, with strong joint advantages that complement each other. According to the company's previous announcement, Kacheng Environmental achieved net profit deductions of 102 million yuan and 145 million yuan respectively in 2015 and 2016, net interest rates stabilized at more than 20%, and performance commitment completion rates were 101.04% and 101.68% respectively. It has good performance capacity. We believe that it is worry-free to complete 178 million yuan of performance promises this year. The company's net profit for the second quarter and third quarter of 2017 increased by 216.81% and 97.65%, respectively. Compared with the 24.02% growth rate in the first quarter, there was a significant increase compared to the 24.02% growth rate in the first quarter, fully demonstrating the contribution of Kacheng Environmental Protection to the company's profitability.
Take advantage of the location advantages of Beijing-Tianjin-Hebei Province to go deep into the water treatment and PPP markets
Jiacheng Environmental Protection currently has 8 franchise projects, mainly distributed in the Beijing-Tianjin-Hebei region. Among them, the Santai Town Sewage Treatment Plant project in Anxin County is located in Xiong'an New Area. In the future, a new round of Beijing-Tianjin-Hebei collaborative development with Xiong'an New Area as the core, and Xiong'an New Area's “green, intelligent, high-end, and high-tech” development positioning will benefit the company's business widely. In addition to traditional construction and operation projects, the company has also further developed the water treatment market through PPP. Since 2016, the subsidiary Binhai Marine Industry and Kacheng Environmental have won two consecutive bids for Shahe City Sewage Treatment and Lulong County Water Treatment and other municipal projects. In March of this year, Jiacheng Environmental won the bid for the Wangkuai Town Sewage Treatment Plant Project in Xingtai Economic Development Zone, achieving a major breakthrough in the PPP field, and the smooth commencement of the project contributed to increased performance.
Optimistic about the long-term positioning of the Industrial Investment Group and maintaining the buying rating
The company has a unique location advantage. After the merger and acquisition of Jiacheng Environmental Protection, the water treatment business will be greatly expanded. The PPP project boom will bring rapid growth opportunities. At the same time, the company will benefit from collaborative development in the Beijing-Tianjin-Hebei region, and there is huge room for imagination in the future. Furthermore, the company set up an environmental protection industry fund and increased the capital of Zhongfu Tianhe to enter the field of old-age care. In the long run, we are optimistic that it will develop into an industrial investment holding group integrating various business formats such as water collection, ecology, and health. The company is expected to achieve net profit of 159.9 million yuan and 208 million yuan respectively in 2017 and 2018, corresponding to EPS 0.63 and 0.82 yuan/share, maintaining the purchase rating.
