Main points of investment:

Maintain the "overweight" rating. The net profit of the maintenance forecast company from 2020 to 2022 is 7.8,8.8 and 1.05 billion respectively, and the corresponding EPS is 1.09,1.23,1.47 yuan respectively. Maintain the target price of 16.22 yuan.

The performance is basically in line with expectations. 1) the revenue is 3.251 billion, the same as the same period last year; the attributable net profit is 194 million, an increase of 2% over the same period last year; and the non-attributable net profit is 171 million, the same as the same period last year. 2) non-recurrent profit and loss + 23.39 million mainly includes government subsidy and incentive funds 58.78 million and new gold leaf hedging business profit and loss-10.66 million. 3) the gross margin is 13.05% and the net profit margin is 5.87% lower than the same period last year by about 1pct.

The harmless business has a high growth, and the resource business is lower than expected. 1) the revenue of the environmental protection sector was 210 million yuan, an increase of 21% over the same period last year, and the attributable net profit was 57.95 million yuan, an increase of 30% over the same period last year. ① Guangdong Heyuan revenue of 65.16 million yuan, net profit of 42.12 million, net profit margin of 65%, extremely strong profitability, in line with expectations.

The ② project is progressing smoothly. The cement kiln cooperated with Tianyuanda, Tianhui Longyuan and Kulun Banner to collect evidence, increasing the production capacity by 180000 tons, and the comprehensive disposal project of Xiangcheng in Jining, with an additional production capacity of 55000 tons. 2) affected by the decline in commodity prices and other factors, the company lost money in the comprehensive utilization of resources business. The revenue of the new materials sector was 2.04 billion, an increase of 1% over the same period last year, and the attributable net profit was-33.49 million yuan, compared with 6.22 million yuan in the same period last year.

The cement business is operating steadily. 1) the business income of the building materials business reached 9.9 yuan, down 4% from the same period last year, and the attributable net profit was 150 million, an increase of 9% over the same period last year. 2) benefiting from the demand driven by infrastructure and off-peak production, the price of cement in Qinghai has increased significantly, so the net profit of Qinghai building materials business has increased significantly compared with the same period last year. 3) however, the heavy rain in Guangdong is frequent, and the unit cost of purchasing limestone has increased by nearly 50 yuan compared with the same period last year, and the net profit of building materials business in Guangdong has dropped greatly compared with the same period last year.

Risk hint: the production progress or operating status of the hazardous waste project is lower than expected; the cement price is lower than expected.