Events:
The company issued a forecast for the first quarter of 2018, and expected to achieve a net profit of 1375.16-17.1896 million yuan from January to March 2017, compared with 11.4597 million yuan in the same period last year, an increase of 20% and 50% over the same period last year.
Comments:
The project is progressing smoothly and the quarterly results are expected to increase steadily:
In the first quarter of 2018, the company is expected to achieve a net profit of 1375.16-17.1896 million yuan, with a year-on-year growth rate of 20%, 50%, and a steady improvement in performance. Considering that the abnormal profit and loss in the current period was 5.13 million yuan, compared with 5.0298 million yuan in the same period last year, excluding the impact of non-recurrent profits and losses, the year-on-year growth rate reached 34.1%, 87.6%, a substantial increase over the same period last year, mainly due to the good operating condition of the company during the reporting period. the project is progressing smoothly, and the company's first-quarter performance forecast is beautiful, which will lay a solid foundation for annual performance growth.
The abundance of on-hand orders has contributed to sustained high growth:
From January to March in 2018, the company signed a total of 2.116 billion yuan of newly signed project contracts, of which PPP project orders totaled 1.69 billion yuan, accounting for 79.87 percent of all projects. The total amount of newly signed order contracts since 2017 is 43.351 billion yuan, compared with the estimated revenue of 9.175 billion yuan in 2018, and the guarantee ratio of order income is about 4.72. orders on hand are very abundant, ensuring the company's future performance will continue to grow. At the same time, the framework agreement signed by the company with the local government since 2016 is as high as 53.87 billion yuan, which is very large, and because of the company's moat in the field of land desertification management, the framework agreement has been transformed into an order with strong certainty. to provide support for the continued high-speed landing of future orders.
Multiple financing modes are in parallel to ensure the smooth implementation of PPP projects:
On December 13, 2017, the company plans to set up Alashan League Nakano Bifang Investment Center Industrial Fund in conjunction with Inner Mongolia Donghui Health Industry Co., Ltd., Inner Mongolia Hexinhuitong Investment Management Co., Ltd., the size of which is tentatively scheduled to be 220 million yuan to provide financial support for the company's ecological restoration PPP project. On January 29 this year, the company plans to issue no more than 200 million US dollars of bonds outside China with a maturity of 3 years. This issue will further improve the company's debt structure, broaden financing channels, and ensure the smooth landing and implementation of PPP projects.
Under the supervision of document 23, the ecological and environmental protection PPP leaders of private enterprises may benefit:
Recently, the Ministry of Finance issued Caijin [2018] No. 23, which focuses on the requirements for financial enterprises to participate in the investment and financing behavior of state-owned enterprises, local governments, PPP and government financing platforms, and further strengthens the supervision of state-owned enterprises and local governments' participation in PPP project construction. We believe that with the implementation of the new round of supervision, the proportion of private enterprises participating in PPP projects will further increase in the future, and the proportion of ecological and environmental protection and other PPP projects suitable for the construction of ecological civilization will also be gradually expanded, and the leading companies of private enterprises with flexible financing methods and high quality PPP projects may benefit.
Financial forecast and valuation: it is estimated that the company's net profit from 2017 to 2019 will be 8.53, 12.71 / 1.801 billion yuan, an increase of 151.5%, 49.0% and 41.7%, corresponding to an EPS of 0.53, 0.79 and 1.12 yuan. The current share price corresponds to a "highly recommended" rating of 19.3 PE from 2017 to 2019, which is 12.9 Universe 9.1.
Risk tips: PPP project expansion and landing is not as expected, payback risk and so on.
