Event: the company released its quarterly report for 2017. during the reporting period, the company achieved revenue of 2.584 billion, an increase of 93.91% over the same period last year, and a net profit of 445 million, an increase of 192.39% over the same period last year. Net profit after deducting 369 million, an increase of 155.26% over the same period last year. Of this total, revenue in the third quarter reached 1.012 billion, an increase of 112.42 percent over the same period last year, and the net profit returned to the mother was 186 million, an increase of 477.29 percent over the same period last year.
There was a substantial increase in performance and a substantial reduction in asset impairment losses. The company's revenue in the third quarter increased by 112.42% over the same period last year, and its net profit increased by 477.29% compared with the same period last year. The substantial increase in performance was mainly due to the increase in the company's engineering contracts, equipment sales contracts, and the acceleration of the construction of PPP projects. In the first three quarters, the company's financial expenses increased by 93.51% compared with the same period last year, and the asset impairment loss decreased by 7416.47% compared with the same period last year, mainly due to the company's recovery of accounts receivable that had originally been set aside for bad debts.
Acquire the source state of environmental protection, and continue to promote the layout of comprehensive environmental platform companies. During the reporting period, the company intends to issue shares to all the shareholders of the source state to acquire the 100% equity held by it, with a transaction price of 550 million yuan. Source environmental protection three-year performance commitment is not less than 38 million, 47 million, 57 million. In 2014, the company acquired Zhejiang dredging and Shuimei Environmental Protection respectively, and entered the field of water conservancy and sewage treatment; in 2016, the company acquired Zhongyi Ecology and entered the field of ecological restoration. After years of development, Xingyuan Environment has realized the transformation from a single equipment manufacturing enterprise to a comprehensive environmental protection enterprise. This transaction will further improve the company's business layout, connect the company's existing business lines, and enhance the company's profitability.
The layout of the whole industry, the order on hand is sufficient to ensure the development of performance. Through a series of mergers and acquisitions, the company has realized the deep integration and coordination of "design + equipment + engineering + operation + maintenance" in the field of environmental protection.
The company fully seizes the opportunity of the PPP model to undertake a large number of PPP orders. In the first half of the year, the company signed the PPP project for the construction of urban parks and green space in Ningguo City, the first phase of the construction project of Tuofuhan Town, Wensu County, the construction project of Shibing County for poverty alleviation and relocation (poverty alleviation and ecological migration), and the general contract project for the construction of stadiums and stadiums, totaling 7.58 billion yuan (including pre-winning projects), with a winning order of 1.918 billion yuan in 2016, providing strong support for future performance.
Investment rating and valuation: the company's net profit from 2017 to 2019 is expected to be 531 million, 795 million and 1.053 billion yuan, EPS is 0.52,0.78,1.04 yuan, price-to-earnings ratio is 53 times, 35 times, 27 times respectively, given a "buy" rating.
Risk hint: the progress of PPP is not as expected and the market competition is intensified.
