Events:
The company publishes the 17-year annual report. During the reporting period, the company achieved revenue of 2.071 billion yuan, an increase of 22.95% over the same period last year, and net profit of 305 million yuan, an increase of 16.44% over the same period last year, which was lower than expected. The company released its quarterly report for the first quarter of 18 years. During the reporting period, the company achieved revenue of 280 million and net profit of 89 million, down 28.56% and 12.91% respectively from the same period last year, which was lower than expected.
Main points of investment:
The Huizhou project and solid waste disposal were greatly promoted. Haotian was lower than the expected impairment, and the performance in 2017 was lower than expected. Among them, 1.
The company's Huizhou Icos C 5 / C 9 separation and comprehensive utilization EPC project progressed smoothly, with project contracting business income of 1.062 billion yuan, an increase of 48.08% over the same period last year, accounting for 51.29% of the company's operating income this year. The market was opened up smoothly, and the operating income of solid waste treatment in Jilin Province reached 188 million yuan, an increase of 133.61% over the same period last year. Two key projects promote the improvement of the company's performance and high growth possibility. However, some businesses were shut down due to supervision and inspection, affecting the current performance. Revenue fell 31.42% from the same period last year, and the final impairment was 64.73 million yuan, which was lower than originally expected. In the first quarter of 2018, the company is in the project shift period, and the original Huizhou project is nearing completion, and we look forward to the start of the new project (444 million of the energy-saving project order was not implemented by the company at the end of 2017). In addition, the Huizhou project rebate is in place, and the net cash of operating activities increased by 282% in 2018.
High-quality and dangerous license plate, looking forward to the production capacity landing. The comprehensive disposal license of 42 kinds of wastes in Jinghua radiates all over Heilongjiang Province, and the annual output of hazardous waste in the province will reach 1.04 million tons by 2020. The first phase of the project is under construction, with an annual comprehensive disposal scale of about 83900 tons, which is expected to be completed and put into production in May 19. It is estimated by the company that the net profit of the hazardous waste project will reach 70.99 million yuan / year after reaching production. The qualification of Jilin solid waste license, a wholly owned subsidiary of the company: physical and chemical 8000 tons, incineration 10, 000 tons (including medical waste), landfill 110000 tons. At the same time, the largest hazardous waste landfill in three northeastern provinces (the only dangerous waste landfill in Jilin Province) is under construction, with a storage capacity of 1.4 million square meters, which is extremely scarce. And the company acquired 51% of the holding shares of Taiyuan Oil in 16 years, which will cooperate with the company's deep petrochemical resources.
The treatment of the Black stinky River is the focus of the 13th five-year Plan, and the company has obvious first-mover advantages. The national market space for the treatment of black and smelly water is about 100 billion by the end of 2020. The company cuts into the management of Heidi River through acquisition beyond Kechuang. We expect the company to benefit greatly from the approaching Black Stinky River assessment and tighter regulation. The rigid demand for waste acid disposal has sufficient market space and obvious thickening of performance. The waste acid is treated as a rigid demand, and the total amount is huge. According to the statistics of China Chemical Industry Information Center, China produces more than 100 million tons of industrial waste acid every year. According to the national annual metal processing and pickling production of 20 million tons of waste hydrochloric acid, it is calculated that the future corresponding investment demand is 10 billion, and the operating space is 10 billion / year. There are nine major scrap processing bases in China, with a scrap capacity of more than 3000 tons per day, which is expected to give priority to the release of demand. The company's resource technology is in line with the trend of environmental protection. In the first three years after the first phase was put into production, the annual net profit was 13.4821 million, and the performance increased significantly.
Holding petrochemical tailing seam market leader, put into production at the end of 2017, for the future performance growth point. When the first phase of Huizhou Ecos project is completed at the end of November 17, it will become the largest C5 separation project in the country (with an annual raw material processing capacity of 300000 tons).
C5 raw materials are scarce. It is estimated that the total amount of C5 raw materials in the country is no more than 1.8 million tons, and Icos's first phase accounts for 300000 tons, accounting for 17%, which is the largest comprehensive utilization project in Asia. And after the completion of the second phase of Ecos, the deep processing capacity of C5/C9 will be formed. the main products are high-end resins such as DCPD hydrogenated resin and C-9 hydrogenated resin, which have a wide range of applications. The company has become the largest shareholder by 45% of Huizhou Ecos in 16 years, and it is expected that the commissioning of the project will greatly improve the company's profit level.
Profit forecast and investment advice: combined with the performance forecast, we slightly lowered the 18-19 net profit forecast to 648 million, 842 million (originally 6.78, 892 million), increased the 2020 profit forecast by 1.075 billion, corresponding to 18-year PE of 20 times, 18-year performance inflection point clear, order release accelerated, maintain the "buy" rating.
