This report is read as follows:
The company announced the acquisition of 66% equity of Dafengyuan, a hazardous waste disposal project in Kunming, Yunnan Province, with 178 million yuan, and continued to be optimistic about the advantages of the company's comprehensive environmental protection platform and maintain its "overweight" rating.
Main points of investment:
Maintain the "overweight" rating. Maintain the company's forecast of EPS0.25 in 1718, 0.33 yuan, if the 18-year reserve EPS is 0.42 yuan after the completion of the reorganization (the current stock price PE=23), the company's industrial chain layout of the next city, maintain the target price of 17.47 yuan, maintain the "overweight" rating.
Precision card is located in the southwest, when high-quality operating assets are expanding. This time Dafengyuan is the operator of Kunming Hazardous waste treatment and disposal Center, providing services for Kunming and its surrounding areas. The annual production of hazardous wastes in Yunnan Province is about 500000 tons, which has been stable in the past two years. The disposal price of hazardous waste incineration in Kunming is 3300 yuan / ton, and the stabilization / solidification disposal price is 1800 yuan / ton. at present, the environmental protection supervision pressure of industrial enterprises is great, and the disposal price is rising steadily.
With a scale of 33,000 tons per year, there is room for profit improvement. Dafengyuan is mainly engaged in harmless disposal and comprehensive utilization of hazardous wastes, with a total disposal qualification of 37 categories of hazardous wastes, with a total disposal scale of 33, 000 tons per year. including 9000 tons / year incineration disposal production line, 10000 tons / year landfill disposal production line, 10000 tons / year physicochemical disposal production line, 4000 tons / year comprehensive utilization production line.
Dafengyuan Company made a net profit of 10.21 million yuan from January to October 2017. With the commissioning of industrial enterprises such as China Petroleum & Chemical Corp in Yunnan, there is still much room for improvement in the capacity utilization rate of Dafengyuan.
Improve the business + business model, strong competitiveness of environmental protection platform has emerged. Through the layout of hazardous waste and soil remediation, the company has achieved new growth of twin engines in business; at the same time, actively improve the existing environmental consulting, solid waste, non-electric smoke, new energy and other areas of business as a supplement. Finally, we will achieve a business model with primary and secondary, a combination of heavy and heavy assets, a steady cash flow, and a project to provide flexibility, so as to create a highly competitive comprehensive environmental protection platform.
Risk hint: the growth rate of the atmospheric plate will decline in 2018 and beyond; the expansion of soil remediation is not as expected.
