2Q20 homing net profit-27%, lower profit forecast, target price 13.5 yuan / share 1H20 Company realized revenue / homing net profit / deducted non-homing net profit 14.8 pesos 150 million yuan, compared with the same period last year-12% Universe 36% Mobil 36%, hazardous waste disposal demand decreased, the price of resource-based products fell. 2Q20 realized revenue / return net profit / deduction of non-return net profit RMB 8.2 million, compared with the same period last year,-7%, 27%, 28%. The disposal capacity of hazardous waste has maintained a rapid growth, but the epidemic situation affects the demand for disposal, and the gross profit margin of resource utilization needs to be improved.
The profit forecast is lowered, and it is estimated that the 20-22 EPS will be 0.42 soybean 0.64 billion 0.80 yuan, and the 21-year 21x target Pamp E will be given a target price of 13.5 yuan per share, maintaining the "buy" rating.
The hazardous waste project has been fully promoted, and the company's long-term total production capacity of more than 2.5 million tons / year has maintained a relatively rapid growth. 1H20 has added four new hazardous waste projects and 838 million tons / year of hazardous waste disposal qualification, an increase of 4.4% over the end of the 19th year (1.9 million tons / year), of which the incineration / landfill / physicochemical qualification is 4.9810,600 tons / year respectively, an increase of 17%, 6% and 4% over the end of 1919. According to the company's guidelines, 2H20 is expected to increase its incineration / landfill capacity by 3.0 million tons per year, an increase of 10 percent over the end of 1919. 54%. By the end of June 20, the company had 7 projects under construction or proposed, with a total design qualification of 5175,000 tons / year, of which the resource utilization / incineration / landfill / physicochemical qualification was 17.2 million tons / year respectively.
The epidemic affects the demand for hazardous waste disposal, and the resource utilization gross profit margin needs to be improved. 1H20 Company's harmless business (industrial waste treatment and disposal) achieves a revenue of 690 million yuan / yoy-13%, gross profit 50%/yoy+1 pct. Affected by the epidemic, upstream and downstream enterprises shut down and reduce production, resulting in a decline in demand for hazardous waste disposal. 1H20 Company's resource utilization business (industrial waste resource utilization) achieved a revenue of 480 million yuan / yoy-15%, gross profit margin 23%/yoy-4 pct, the overall demand and price of resource products decreased.
The company hopes to promote the cost reduction and efficiency of resource utilization business by means of adjusting the structure of resource products and improving the recovery rate of valuable resources.
Optimize the debt structure and broaden the financing channels
The company disclosed that the comprehensive financing cost so far is 4.35%, which is 0.55 pct less than that of 19 years, and the financial cost is 6.22 million yuan lower than the same period last year. In April 20, the company successfully registered 1.5 billion yuan of medium-term notes, and the initial issue of 600 million yuan was issued at 3.2% interest rate, effectively reducing financing costs. At the end of June 20, the company's asset-liability ratio was 49.9%, down 1.7 pct from the end of 1919, achieving a "double drop in deposits and loans". Bank deposits / interest-bearing liabilities decreased by 316 trillion yuan, respectively, and the comprehensive credit line was 7.9 billion yuan, of which 5.2 billion yuan was unused. to ensure the supply of funds for long-term development.
The profit forecast is lowered, the target price is 13.5 yuan, and the "buy" rating takes into account the impact of the epidemic on the demand and price of hazardous waste disposal. We reduce the profit forecast. The estimated net profit for 20-22 years is 3.7 million yuan (5.7pm), corresponding to EPS 0.42, 0.64 and 0.80 yuan, respectively, and PE is as much as 28-18-15. With reference to the company's 21-year Wind consensus expectation, the average PE is 14 times. Considering the company's leading position in the hazardous waste disposal industry and the expected return net profit growth in 21-22 years, we give the company a 21-fold target PE for 21 years, with a target price of 13.5 yuan per share (previous value 11.07-12.24 yuan). Maintain a "buy" rating.
Risk hint: the project production schedule is not as expected, and the large investment leads to the deterioration of cash flow.