Performance summary: the operating income of 2020H1 Company is 780 million yuan (+ 16.1%); the net profit attributable to the shareholders of the listed company is 150 million yuan (+ 26.7%), and the net profit attributable to the shareholders of the listed company after deducting is 150 million yuan (+ 38.8%).
It was less affected and achieved healthy growth in the first half of the year. The increase in performance is mainly due to the operation of sewage treatment projects and the adjustment of water prices in the company's investment and operation business, the increase in the disposal of sludge treatment projects and the recovery of some accounts receivable. 2020H1's comprehensive gross profit margin is 40.4% (+ 3.8pp), and the expense rate for the period is 14.4% (- 3.4pp), of which the sales expense rate is 1.25% (- 0.5pp), the management expense rate is 7.4% (- 2.0pp), and the financial expense rate is 5.7% (- 0.9pp). According to the specific business, the revenue of investment and operation business is 290 million yuan (+ 17.5%), the gross profit margin is 69.0% (+ 3.2%), the income of project contracting business is 320 million yuan (- 6.0%), and the gross profit margin is 22.1% (+ 4.6%). Equipment production and marketing business income 80 million yuan (+ 12.6%), gross profit margin 21.6% (- 4.6%). The growth of gross margin of operating business drives the growth of gross margin.
Solid waste business is ready to start, Changchun project significantly thickens the company's profits, the follow-up development is worth looking forward to. The company introduced Japanese YM bacteria high-temperature aerobic fermentation technology for centralized harmless treatment and resource utilization, which is a new driving force for future growth. In 2019, the revenue of sludge business reached 100 million yuan, a year-on-year increase of 71.6 percent, and the net profit of Changchun project was 20 million yuan. 2020 H1 Changchun project handled 192000 tons, with an average daily capacity of 1100 tons, with a net profit of 20 million yuan. It has achieved 98% of the project's annual net profit last year; at the same time, the new Xinjiang project receives Shihezi sludge, with a total sludge treatment volume of 18000 tons, and the follow-up development is worth looking forward to.
Additional investment has been made in Aidi Weixin to develop vaccines and expand other businesses. On March 9, 2020, the company invested 18 million yuan in Beijing Aidi Weixin, holding 4.7% of its equity and enjoying the priority of 12 million yuan for additional investment. 2020H1 companies continue to increase capital to invest in shares, so far a cumulative investment of 30 million yuan. 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. the company combines the experience of Jiangsu Peng Harrier Pharmaceutical Co., Ltd. in the pharmaceutical field to increase investment in Aidi Weixin's active research and development of vaccines, which can expand investment outside its main business.
Profit forecast and investment advice. It is estimated that the EPS from 2020 to 2022 will be 0.59,0.76 and 0.97 yuan respectively, corresponding to 16x/12x/10x for PE, maintaining the "buy" rating.
Risk tips: the project construction schedule is not up to expectations, water prices are not raised in time, policy risks, and so on.
