Event: according to the 2014 report released by Guodian Qingxin (002573), the company achieved operating income of 1.277 billion yuan, an increase of 66.9% over the same period last year, a net profit of 271 million yuan belonging to shareholders of listed companies, an increase of 50.3% over the same period last year, and an EPS of 0.51 yuan, in line with expectations. At the same time, it is predicted that the net profit attributed to shareholders of listed companies in the first quarter of 2015 is about 6058.63-70.684 million yuan, an increase of 20% and 40% over the same period last year.
Comments:
Desulphurization and denitrification EPC construction and BOT operation business together promote substantial growth in performance. On the basis of actively expanding the EPC construction business, the company continues to devote itself to the desulphurization and denitrification franchise project with long-term stable income. The company increased its market development efforts in 2014, undertaking two new desulphurization and denitrification franchise projects and more than 10 construction projects; at the same time, a number of desulphurization franchise projects and denitrification BOT projects have brought sustained and stable benefits for the company. Due to the contribution of the above projects to the company's performance, the company's operating income and net profit increased significantly by 66.9% and 50.3% respectively in 2014 compared with the same period last year. The company's performance has shown a trend of sustained and rapid growth in the past three years. It is expected that net profit in the first quarter of 2015 will increase by 20% and 40% compared with the same period last year. Due to the relatively stable operation of desulphurization operations, Qingxin Tiandi, a subsidiary, acquired and operated the desulphurization franchise project of Wushashan Power Plant in the second half of 2014; the EPC project was built quickly; Yungang BOT project No. 3 received ultra-net emission subsidies in Shanxi Province, and the company expects net profit to increase by 20% and 40% in the first quarter of 2015 compared with the same period last year.
The transformation business of desulphurization and dust removal by virtue of technical advantages will increase greatly. The market of desulphurization, denitrification and dust removal of coal-fired units is expected to reach 40.5 billion yuan. Various provinces have successively introduced subsidy policies for ultra-net emissions, and the period from 2015 to 2016 will be the peak period for the transformation of ultra-net emissions, and the number of construction projects is expected to increase significantly in the next two years. The company has a number of technical advantages in the field of atmospheric environmental protection: wet desulfurization core technology with completely independent intellectual property rights, ultra-clean desulfurization, dust and fog integration technology, and has won the international leading right to use dry desulfurization technology. With outstanding technical advantages, the company fully benefits from the broad space of the smoke control industry, and its construction project revenue is expected to maintain rapid growth.
Rich experience in desulphurization and denitrification franchising and strong competitiveness. The proportion of capacity of units that have signed thermal power desulphurization franchise contracts is only about 13.1%, and that of thermal power denitrification franchise contracts is only about 3.12%. Flue gas desulphurization and denitrification franchise is the future development direction of flue gas treatment industry. The company has rich experience in desulphurization and denitrification franchise projects. In 2013, the desulphurization franchise scale of the company ranked third in the country, and denitrification franchise ranked first in the country. In the future desulphurization and denitrification franchise market, the company has a strong competitive strength.
Extension expansion adds new profit growth points. The company has set up a wholly-owned subsidiary SPC Europe in Poland to promote independent intellectual property technology and open up the international business market; to acquire fresh and energy-saving, Boyuan technology, central Huaqing and other companies to develop projects in the field of energy conservation and comprehensive utilization of resources. At present, the projects of various subsidiaries have been debugged and put into operation one after another, which is expected to bring new profit growth points for the company and promote the sustainable development of the company.
Investment advice: maintain a "recommended" rating. It is estimated that the EPS of the company from 2015 to 2017 is 0.95,1.38,1.90 yuan respectively, and the corresponding PE is 39 times, 27 times and 20 times respectively. The company's compound growth rate in the next three years is as high as 55%, and the current valuation level is lower than the industry average, maintaining the "recommended" investment rating.
Risk hint. The expansion of the project is lower than expected, the market competition intensifies the decline of gross profit margin, and the systemic risk of growth stocks.
