Three quarterly results in 2019 were released, with a growth rate in line with expectations.
The company issues three quarterly results announcement. In the first three quarters of 2019, the company's operating income was 313 million yuan, an increase of 49.34% over the same period last year, mainly due to the company's energy conservation, environmental protection and Internet marketing, with an increase in business volume; deducting 81.012 million yuan in non-homed net profit, an increase of 310.87% over the same period last year; the net cash flow of operating activities was 15.852 million yuan, an increase of 28.97% over the same period last year; the company issued a forecast of operating results in 2019. It is estimated that the net profit of homing in 2019 will increase by 186.46% to 272.40% compared with the same period last year.
Garbage incinerator protection industry leader, the number of newly signed orders and project completion is growing rapidly.
The company is the only listed company in the field of waste incinerator protection in China, which has formed a dual-main business pattern of energy saving and environmental protection + Internet marketing. Under the background of the implementation of national environmental protection policies, the company is gradually focusing on energy conservation and environmental protection industry, seizing the opportunity to actively expand its business, among which garbage incinerator protection, acoustic noise reduction projects and other related business newly signed orders and project completion have maintained rapid growth.
With the implementation of the waste classification policy, the demand of waste incineration and its supporting industries is expected to increase rapidly.
At present, garbage incineration accounts for less than 50% of garbage disposal in China. Compared with 80% of waste incineration in developed countries such as Japan, there is still room for improvement. With the introduction of laws and regulations on garbage classification in 2019, the work of garbage classification has been launched all over the country. The sorting cost of heavy metals and other harmful substances in the waste treatment process of the municipal solid waste incineration plant will be greatly reduced, and the waste incineration capacity is expected to be accelerated. The company's waste incinerator and supporting protection business demand is expected to grow rapidly.
The financial situation has improved significantly, which is conducive to the company's rapid promotion of business layout.
In the first three quarters of 2019, the net cash flow generated by the company's operating activities increased by 28.97% compared with the same period last year, mainly due to the company's strengthening the management of accounts receivable and the increase in repayment. The amount received in advance increased by 69.25% compared with the end of 2018, mainly due to the fact that part of the company's business adopted the mode of receiving progress payment in advance to reduce risk.
Risk hints: the market demand for incinerator protection and acoustic noise reduction engineering is weak, and the progress of technology research and development is slow.
Investment advice: first recommendation, "Buy" rating.
It is estimated that the company's net profit from 2019 to 2021 will be 1.11 million yuan, respectively, a year-on-year growth rate of 31.7%, 28.4%, 27.9%, diluted EPS=0.36/0.62/0.77 yuan, and the current share price corresponds to PE=23.5/13.8/11.1x. The industry waste classification policy drives the rapid increase in the demand for waste incinerator and supporting protection business. As the only listed company in the field of waste incinerator protection in China, the number of new orders is expected to continue to grow. Recommended for the first time, a "buy" rating.