Items:
The company announced that the consortium formed by subsidiary Jinglan Muhe and Inner Mongolia Liaohe Engineering Bureau Co., Ltd. won the bid for the cooperation between the government and social capital of Puzhihei efficient water-saving irrigation in Qiubei County (PPP project), with Jinglan Muhe as the leader of the consortium. The project adopts the BOT model, and the income return is the feasibility gap subsidy. The term of the contract is 16.5 years (including the construction period of 1.5 years), and the total investment of the project is estimated to be 132 million yuan.
Comments:
Jing Lan Muhe water-saving business is advancing by leaps and bounds, and the situation of agricultural water-saving faucet shows that the landing of water-saving orders has been accelerated in the past 17 years. In September, it won the bid for the modern agricultural "Tian Tian Tong" intelligent water-saving irrigation project (PPP model) in Julu County, with a total budget investment of 1.715 billion yuan. The total amount of newly announced projects in 2017 exceeds 7 billion yuan (including framework agreements), indicating that the company's competitive advantage in the water-saving industry has been significantly strengthened after the acquisition of Muhe water-saving. Muhe water-saving commitment 17-18 years net profit of not less than 140.176 million yuan, on-hand orders will effectively ensure the high growth of water-saving business performance.
In addition, based on ecological water-saving business, the company introduces the concept of Internet, actively creates "ecological cloud services", develops smart ecological and smart city business, and has landed many projects, showing strong market expansion ability and attractive prospects.
The speed of obtaining PPP orders is accelerated, and the integration with northern gardens shows that the company has completed the acquisition of northern gardens, improving the ability of ecological restoration and watershed management. The total amount of PPP contracts for northern gardens in 2016 is 5.6 billion yuan. Since the beginning of this year, it has won the bid for large-scale PPP projects such as Liangshan County (3 billion), Helan County (1.2 billion) and Weifang High-tech Zone (998 million). Northern gardens promise that the cumulative net profit of 16-19 years will not be less than 423 million yuan, and the on-hand order will effectively guarantee that the garden business will exceed expectations.
Since Beijing Blue Holdings joined the main company in 2014, the integrated service provider of "eco-environment + Internet of things" industry has successively completed major asset restructuring and divestiture of the original industry, acquisition of Muhe water-saving and northern gardens, transformation of eco-environmental service industry, and established a business layout based on intelligent ecological water-saving, smart city construction, ecological restoration, energy-saving business and data information business. At present, the synergy of various plates of the company begins to appear, and the great wisdom ecological pattern begins to take shape. The company held a "Science and Technology Internet of things Product Conference" in Beijing in November, and signed a "Strategic Cooperation Framework Agreement" with Beijing Sanju Environmental Protection New Materials Co., Ltd., the National Water-saving Irrigation Beijing Engineering and Technology Research Center and Xintian Science and Technology Co., Ltd., to establish a strategic partnership to jointly develop smart agriculture business.
Profit Forecast and Investment rating
After the transformation, the company has a clear development strategy, smooth new business development, rich orders on hand, high performance and strong certainty. It is predicted that the net profit for 17-19 years will reach RMB 408, 538 and 695 million, respectively, and the corresponding diluted PE will be 23X/17X/13X, maintaining the "buy" rating.