Main points of investment:
Water-saving irrigation is the general trend, leading the development of the industry. The transfer of agricultural population, the acceleration of land transfer, the promotion of water rights reform and the strict control of the use of chemical fertilizer determine that water-saving irrigation is an important way to realize agricultural production in the future. Jinglan Muhe, a subsidiary of the company, is the leader in the water-saving irrigation industry, and has a leading advantage in the industry in terms of revenue scale, regional layout and business model. At present, the company has relatively sufficient orders on hand, and the framework agreements continue to transform, which can form a higher guarantee for future performance growth. The company intends to carry out the separation of Jinglan Muhe, which will help to improve the operation and production efficiency of the energy-saving irrigation plate and provide support for stable performance growth in the future.
The system in the field of environmental restoration is becoming sound, and the acquisition of Zhongke Ding to improve the layout of the ecological plate. The system of environmental remediation industry has been gradually improved, with more than half of the progress of detailed investigation of soil pollution and the landing of the "soil Law", the industry is gradually approaching the stage of orderly release of demand. Zhongke Dingshi is a leading enterprise in the environmental restoration industry, with a strong technical background and rich experience in large-scale and complex engineering. It has a strong competitive advantage in the period when the industry pattern has not yet taken shape and the industry demand is rapidly released. The listed company has now acquired 21% of the equity of Zhongke Dingshi, and subsequently plans to continue to acquire 73.89% of the equity by issuing shares and participating in the establishment of M & A funds (Zhongan and Hong). After the completion of the follow-up process, China Science and Technology is expected to bring about 100 million annual profits for listed companies.
Beijing blue northern garden business has expanded obviously to the field of ecological management, and it is expected to form a good coordination with Zhongke Dingshi. In 2018, the Northern Garden won the bid for two river regulation and water environment restoration projects, and their business scope has been obviously extended to the field of water environment control. Zhongke Dingshi and the northern garden will become an important pillar of the company's ecological garden plate in the future. The soil and groundwater remediation business of Zhongke Ding and the ecological management business of the northern garden are expected to form a good coordination, which will form an effective support for the development of the whole ecological plate of the company.
Other business sectors form an important support for the company's "ecological environment + big data, mobile Internet, cloud computing" strategy. Jing Lanyun Zhi and Gu'an Jing Lanyun have created the Beijing Blue Internet of things cloud platform, which plays an important supporting role in the realization of the company's intelligent water-saving operation service. Jinglan youdao, the company's enterprise innovation incubator, provides capital, resources and management support for new technology start-up teams and small and micro companies related to the company's main business, helping them to grow rapidly and be incorporated into the group system after maturity, so as to continuously supplement and improve the company's business. The above auxiliary plates work together to realize the strategic concept of "Ecological Environment + big data, Mobile Internet and Cloud Computing".
Profit forecast and valuation: it is estimated that the EPS of the company from 2018 to 2020 will be 0.35, 0.41 and 0.48 yuan respectively. Corresponding to the closing price of 6.30 yuan on November 30, 2018, the 2018-2020PE is 18.06,15.46 and 13.13 respectively, maintaining the "overweight" rating.
Risk hints: policy promotion is not as expected; project schedule is not as expected; PPP project management risk; reorganization schedule is not as expected; goodwill impairment risk; systemic risk