Event: the company issued a performance forecast on the evening of January 30. It is estimated that the net profit attributable to shareholders of listed companies for the year to December 31, 2017 will be 141.52 million yuan to 169.82 million yuan, an increase of 0% 20% over the same period last year, of which non-recurrent profit and loss is 22.5 million yuan, compared with 23.24 million yuan in the same period last year.
The performance is in line with expectations, and the main business maintains high growth: the company's forecast median net profit for 2017 is in line with our forecast (154 million yuan). During the period, the company's soil remediation, environmental consulting, air purification, garbage power generation operation, new energy and other business progress is normal. Among them, the new energy EPC business contributed 540 million yuan (35%) in revenue in 16 years, and is expected to decline significantly in 17 years because the project is nearing completion and there are no new orders, and this business is not the main business of the company's future development. In the main business, the company continued to make efforts in soil remediation in the past 17 years, with high growth in new orders and performance. In terms of garbage power generation business, as the Hengyang project (1500 tons / day) was put into operation in the third quarter of 16 years, its operation scale expanded from 600t / day to 2100 tons / day, and the revenue from garbage power generation increased rapidly in the past 17 years. The company obtained EIA Class A qualification in August 16, the company actively expanded team building, obtained EIA business qualification expansion in July 17, and then has a three-A, four-B, two-form qualification system, and its business scope has also expanded to the whole country. the performance of EIA has also achieved high growth.
Soil remediation has achieved a major breakthrough in regional and project volume, and has once again come to the forefront of the industry. The company has made a great breakthrough in the development of soil remediation business in the past 17 years, and has successively won orders in Northwest, Central and East China, with a total scale of more than 400 million. On January 21, 18, the company also won the bid for 1.87 billion yuan PPP project in Jiahe County, Hunan Province, including 570 million heavy metal pollution treatment business. This order is also the largest single soil remediation project obtained by the company so far. Major breakthroughs in region and project volume have once again established the company's leading position in the industry.
Strategic acquisition of Jiangsu Kangbo, entering the field of hazardous waste disposal: in December 2017, the company plans to purchase Jiangsu Kangbo industrial waste from Yongqing Group and Hangxiang Swan at a consideration of 1.07 billion yuan by issuing shares. The acquiree promised to deduct 1.06,1.05,113 million yuan in non-net profit in 17-19 years, which is equivalent to 76% of the company's 16-year net profit. Kangbo industrial waste has a total scale of 38000 tons, which is the largest harmless disposal project in Jiangsu Province. After the acquisition of Combo, the company entered the field of Gaojing demeanor hazardous waste disposal, grabbed a large gap between supply and demand in Jiangsu and Zhejiang market, and further expanded to other provinces and cities to create a new performance growth pole.
Maintain the "buy" rating: maintain the company's profit forecast for 17-19 years, EPS of 0.24,0.50,0.68 yuan (18, 19 years to consider dilution), maintain the "buy" rating, the target price is 15 yuan.
Risk hint: the follow-up development progress of hazardous waste is lower than expected, and the execution progress of PPP order is lower than expected.
