The cash buyback of 135 million yuan, close to the upper limit of 200 million yuan, shows that the company is full of confidence in the future development. On the evening of February 4, 2020, the company announced the buyback plan: the amount of shares to be repurchased is not less than 100 million yuan and not more than 200 million yuan, and the repurchase price does not exceed 15 yuan per share. 70% of the repurchased shares will be used for convertible bonds and 30% will be used for equity incentives. As of February 17, the company had repurchased 9.8 million shares, accounting for 2.04% of the company's total share capital, with a total transaction amount of 134.5005 million yuan (excluding transaction fees) and an average repurchase price of 13.72 yuan per share. The company announced the buyback plan on February 4, the first buyback on February 7, and the repurchase of 135 million yuan on February 17, indicating the efficient implementation of the company. In addition, the announcement shows that the buyback plan will continue to be implemented in the future according to market conditions. We expect the company to repurchase according to the upper limit of 200 million yuan, and the absolute value of the repurchase is relatively large. Such a large amount of repurchase is particularly rare in the listed companies in the capital-strapped environmental protection industry, which shows the company's strong financial strength and management's firm confidence in the company's intrinsic value and future prospects. In addition, the share buyback is used for equity incentives and convertible bonds, which is conducive to the establishment of a long-term incentive mechanism, can fully mobilize the enthusiasm of employees, and is conducive to the long-term development of the company.
The water business is rising steadily, and the organic solid waste business is ready to start.
As a veteran water treatment enterprise, the company has a water operation scale of 151.4 million tons per day (including water supply), and is under construction and proposed to build 746 million tons per day. The compound growth rate of gradual operation in the next two years is 22.18%. The company has a sound business style and did not participate in the vicious competition of PPP in the past few years. With the improvement of the industry, the company ushered in a good opportunity for development. The number of new orders in 2019 was 2.72 times that of 2018, leading to a reversal of performance (forecast net profit increased by 72.37% 81.29% compared with the same period last year). The company has strong operational attributes and good cash flow. At the same time, the monetary capital in hand is 500 million yuan, and the asset-liability ratio is only 39.95%. There is still a lot of room for expansion, and there are prospects for growth in the stability of the water business.
While the company is based on water business, it is also actively arranging solid waste business. The introduction of ultra-high temperature fermentation technology of YM bacteria from Japan + the acquisition of joint industry technology + join hands with Ma Sheng Environment to enter the field of organic solid waste disposal to deal with sludge, kitchens, livestock and poultry manure, etc., there are already demonstration projects in Changchun Nongan, Fuzhou, Beijing Nangong and other places, and it is expected to promote replication throughout the country in the future, create a leader in subdivision fields, and organic solid waste business is ready to start. The company's equity incentive performance evaluation has a compound growth of 30% in the next three years, which has long-term investment value.
It is proposed to invest 30 million yuan to increase investment in Aidi Weixin to develop novel coronavirus vaccine.
The company plans to invest 30 million yuan to increase its capital in Beijing Aidi Weixin, after the completion of the capital increase will hold its 7.89% stake. Aidi Weixin focuses on genetic engineering vaccine, DNA vaccine and new vaccine adjuvant technology, and has international technical advantages in the field of vaccine research and development. at present, it has three core varieties: RSV preventive vaccine, hepatitis B therapeutic vaccine and type 1 diabetes therapeutic vaccine.
In January 2020, Aidi Weixin joined hands with Nasdaq Inovio to develop novel coronavirus vaccine, which intends to use DNA vaccine rapid response technology to enter clinical trials in China in a short period of time.
Jiangsu Peng Harrier Pharmaceutical Co., Ltd., which is owned by the company's major shareholders, has a history of more than 50 years and has rich experience in the pharmaceutical field. The company invested in Aidi Weixin this time. On the one hand, based on the past experience of the pharmaceutical industry, it supports novel coronavirus's vaccine drug R & D and production enterprises related to epidemic prevention and anti-epidemic, and expands investments outside its main business. On the other hand, it is also aimed at the current severe epidemic situation of novel coronavirus, which can enhance the level of domestic vaccine research and development, enhance the message of people protesting the epidemic, and highlight the company's high sense of social responsibility.
Refinancing new rules landing + interest rates down, financing improvement environmental protection valuation is expected to increase, the company will benefit
On February 14, the CSRC issued the decision on revising the detailed rules for the implementation of non-public offerings of listed companies, in which many regulations were adjusted, such as the issuance conditions, the discount rate of the issue price, the lock-in period, the number of investors, the validity period of approval documents, and so on. The signs of deregulation are obvious, which is intended to support increasing the intensity of refinancing of listed companies. On February 20, the central bank announced the latest LPR interest rates. The 1-year and 5-year LPR rates were 4.05% and 4.75% respectively, falling by 10 and 5 basis points respectively. As a capital-driven environmental protection industry, the continuous improvement of the financing environment is conducive to higher valuations of the industry, and the company will benefit.
Profit forecast and investment rating: maintain the company's "buy" rating. The company's water business is growing steadily, and the organic solid waste business is ready to start. We are optimistic about the company's development prospects and do not consider the impact of buyback and investment on the company for the time being. It is estimated that the company's 2019-2021 EPS will be 0.62,1.04,1.34 yuan respectively, and the corresponding share price PE will be 22,13,10 times, maintaining the company's "buy" rating.
Risk hint: share buyback and investment Aidi Weixin can not successfully complete the risk, the risk of project acquisition and promotion is not expected, the risk of a substantial increase in accounts receivable, the risk of slow progress of organic solid waste recycling projects, macroeconomic downside risks.
