Investment Summary:
Pioneer: equipment-water-solid waste innovation to maintain the power of long-term development
The company is an established water enterprise with 26 years of deep ploughing and environmental protection, positioning the integrated service provider of the whole industry chain of water treatment; in recent years, it has comprehensively entered the field of organic solid waste with YM bacteria as the core reserve technology.
In 2019, the company achieved an income of 1.97 billion yuan and deducted a non-return net profit of 270 million yuan; the company always took operating profit as the core, with a gross profit margin of 71% for water supply and 62% for sewage, which was much higher than that of other comparable companies; the expense rate during the period was 13.4%. The asset-liability ratio is 43%, and the overall financial control is good.
Accumulation: the scale and quality of water integrated service providers have reached a new level.
The company's water operation has an industry-leading low cost and high gross profit margin. The company's projects are franchise projects with higher gross profit margin, and the scale of the single project is larger, which reduces the cost of per ton of water; in addition, the industrial chain is complete, the operation experience is rich, and the engineering and operating cost control is excellent.
The inflection point of centralized production and treatment fee increase in the company's water business has arrived. At present, the company has put into operation 111.4 million tons of sewage per day and 400,000 tons of water supply per day; it is expected to be put into operation by 2022 with a hand production capacity of 746 million tons per day, including 450,000 tons per day.
Take off: fermentation technology for anchor to enter the new field of organic solid waste in an all-round way
The company is the only enterprise in China that uses YM technology to dispose of organic solid waste on a large scale; this technology has been applied in Japan for more than 40 years, with better effect than traditional technology, low cost, low investment and resource utilization of the products. the company has cooperated with many units to distribute the technology in various sub-fields.
The operating space of sludge disposal in China is 15 billion yuan per year. Under the stricter environmental protection, the demand for sludge disposal will continue to grow.
The company applies YM technology to sludge disposal, and the daily treatment capacity of Changchun Nong'an Project, a benchmark project, is up to 1400 tons, with good benefits and strong replicability; its end products can also be made into cultivation matrix or fertilizer, which is expected to achieve an additional income of 1000-3000 million yuan per year.
Benefiting from garbage sorting, the construction and operation space of kitchen waste disposal in China will reach 72.5 billion and 12 billion respectively in the next few years. The company cooperates with Wuxi Ma Sheng, combines capital and technical advantages, adopts the leading domestic anaerobic biotechnology research and development platform and YM bacteria technology to cut into the kitchen market, and has put into operation 5 projects with a total treatment capacity of 1350 tons per day; in cooperation with Beijing Environmental Sanitation Group, YM bacteria is applied to the largest waste composting plant in China to try the field of domestic waste treatment.
Our country produces nearly 3.8 billion tons of livestock and poultry manure annually, but the comprehensive utilization rate is less than 60%. The company uses a variety of processes such as anaerobic or YM bacteria to dispose of livestock and poultry waste. At present, two livestock and poultry waste treatment projects are under construction, with a total treatment scale of 200,000 heads per day, and three agricultural organic projects with a total capacity of 1078 tons per day.
Upgrade: build high-end equipment business by taking advantage of the fertile soil of the hometown of environmental protection
The company invests in the construction of an intelligent park in Yixing, the stronghold of Yixing, to create an "intelligent, automated and digital" operation platform, integrate Yixing's rich environmental resources, achieve complementary advantages, promote industrial upgrading, and promote the development of small and medium-sized enterprises. PPMI assembly waterworks and solid waste portable fermentation equipment are launched in Zhizheng Park, which adopt new design ideas and advanced technology, and have application examples, which will be popularized in the follow-up.
Investment strategy: the company will usher in the dual performance inflection point in the field of water and solid waste. In the field of water affairs, the company has been ploughing for 36 years, has rich operation experience and strong profitability of the project on hand, and will enter the stage of centralized production of new projects and bid raising and transformation in the next two years. In the field of solid waste, the company takes YM bacteria technology as the core, Changchun sludge benchmarking project has stable operation and good income, and there are many projects in hand sludge, dining, livestock and poultry manure, which is expected to achieve rapid replication.
The company attaches importance to technological research and development and model innovation, and has multi-faceted cooperation with Beijing Environmental Sanitation, Changchun Water, Wuxi Ma Sheng and so on. Internal equity incentives have been introduced, and the company as a whole is expected to maintain the driving force of sustainable development.
Risk hint: the progress of business development and sewage price increase is not as expected; the promotion of environmental protection policy is not as expected.
