Event: the company issued an announcement on the evening of April 10 that ① increased capital to Baohui Environment, an associate of the company, in order to cooperate with Baohui Environment to fund the construction of Zhanjiang Iron and Steel external drainage Comprehensive Utilization Project. The total capital increase is 100 million yuan, including 49 million yuan for Shanghai Ziba and 51 million yuan for Baowu charcoal. After the capital increase, the shareholding ratio of all shareholders remains unchanged. Shanghai Ziba and Baowu carbon materials still hold 49% and 51% of the shares, with a capital of 110 million yuan. ② plans to invest in Jiangsu Kangsper Renewable Resources Co., Ltd. in the form of capital increase to the target company. After the capital increase, Shanghai Xiba holds 51% of the capital contribution / equity ratio of the target company, and the capital contribution / equity consideration is 30.1364 million yuan.
Comments: another milestone in cooperation with Baosteel "1: 1", the order mode may be changed from point to point. Baowu carbon material is a 100% shareholding subsidiary of Baosteel, and Baohui Environment was established in 2015. On July 10, 2018, the company and Baosteel Engineering and Technology Group Co., Ltd. jointly formed a consortium, which won the bid for the EPC general contract project of River molten Steel treatment Center, with a winning bid amount of 372 million yuan. Led by the company and formed a consortium with Baosteel Engineering and Technology Group Co., Ltd., this "1-1" model won the largest order in the industrial water treatment field for the company after the relocation of the water treatment project of Qingdao Iron and Steel Co., Ltd. (with a total amount of 88.98 million yuan). The large-scale increase in Baohui's environmental investment in Zhanjiang is the "1-1" project of the company and Baosteel.
Another milestone in mode cooperation. The company's order model in the iron and steel industry has ushered in a new direction of development, from the previous "point" model of winning individual projects by different steel enterprises to deeply cooperating with major customers to invest in construction projects. Zhanjiang project, as an environmental protection demonstration project of Baowu, is likely to be just the starting point, and it is hopeful that in the future, it will take Baohui environment as the carrier and occupy the zero discharge market of waste water from Baowu Group.
Baowu Group vigorously promotes the construction of zero discharge of waste water, and the average annual operating cost of zero discharge of concentrated salt water reaches 1.7 billion, and the environment of Baohui is promising. At the first Party Congress in 2019, the chairman of Baowu Group proposed to build a green steel plant with "solid waste without leaving the factory, zero discharge of waste water and ultra-low emission of waste gas". Baowu Group E Steel Co., Ltd. plans to achieve this goal within two years, and Baowu Group's market space for zero discharge of wastewater is gradually opened. Baowu Iron and Steel has an output of 68.21 million tons of steel and 54 million tons of concentrated brine in 2018. We estimate that the average annual treatment cost of concentrated brine of Baowu Iron and Steel Co., Ltd. is 1.74 billion, and the operation market is broad.
The dangerous waste project is the next city, and the industrial chain is further extended. Kang Speer is building a comprehensive utilization project of waste packaging buckets in Jiulong Town, Taizhou City, Jiangsu Province. after reaching production, the annual operating income of the project is 46 million yuan, with an average net profit of 12.3 million yuan (the average net profit after reaching production). It is expected to bring significant thickening effect on the company's revenue and profits in the next few years. Prior to the acquisition of Henan Kaishun, Blue Sky Ring Branch has a layout, the industrial chain is further extended. Volkswagen and Yuanba project hazardous waste treatment has been recognized, hazardous waste treatment field has relevant experience.
Profit forecast and rating: considering the follow-up order acquisition of Baohui environment, the gradual construction of Zhanjiang project and entering the operation period, and the Taizhou hazardous waste project entering the operation period, we adjust the revenue and investment income in the forecast hypothesis and raise the profit forecast. The revenue from 2019 to 2021 will be raised from 6.76,7.74,929 million to 7.57,10.54 and 1.455 billion yuan, and the net profit from 2019 to 2021 will be raised from 1.24,1.61 and 217 million to 1.49,2.02 and 264 million yuan, corresponding to 26,20,15 times of PE. Maintain a "buy" rating.
Risk hint: the relevant projects fail to reach production smoothly, business performance is lower than expected, national or local policy changes and other risks that lead to the failure to achieve the purpose of investment.
