This report is read as follows:
The net profit of 2023H1 ownership increased by 7% compared with the same period last year, the performance was in line with expectations, and solid waste was actively opened up in domestic and foreign markets. Cooperate with major shareholder Delun Environment and partner Xiamen Haichen to carry out industrial and commercial energy storage business to create the second growth curve.
Main points of investment:
Maintain the "overweight" rating. We maintain the forecast net profit of the company from 2023 to 2025 is 13.11,14.65 and 1.625 billion yuan respectively, and the corresponding EPS is 0.78,0.87,0.97 yuan respectively. We believe that in the domestic market, in the process of waste incineration gradually moving from "incremental competition" to "stock game", the company has a profound industry accumulation and a broad customer base of Sanfeng grate, which lays a good foundation for the merger and integration of stock projects in the future; in overseas markets, the company has significant synergy advantages of international genes and the whole industry chain, making efforts to open up overseas markets and looking forward to continuous progress in the future. Maintain the target price and maintain the "increase".
The performance is in line with expectations. 1) 2023H1 achieved an income of 2.98 billion yuan, up 4% from the same period last year; the attributable net profit was 633 million yuan, up 7% from the same period last year; and the non-attributable net profit was 606 million yuan, an increase of 5% compared with the same period last year. 2023Q2 net profit per quarter was 283 million yuan, down 19% from the previous quarter. 2) the net cash flow of operating activities was 890 million yuan, an increase of 49% over the same period last year, mainly due to the increase in operating projects and the increase in electricity price subsidy funds and tax rebate government subsidies received during the reporting period.
Solid waste business is operating steadily, and domestic and foreign markets are actively opened up. 1) 2023H1 has a new investment of 4350 tons and is preparing for construction of 4500 tons; a total of about 6.81 million tons of domestic waste has been entered into the plant, an increase of 13% over the same period last year, and the production capacity has been released steadily. 2) Sanfeng Kawanta signed a total of 6 contracts for the supply of incinerators and complete sets of equipment, with a total design capacity of 3950 tons per day, of which the contract for the supply of incinerator equipment for the fifth phase of Salabri in Thailand was signed in overseas markets. to achieve continuous service for the project; another signing of Vietnam Beijiang waste incineration design contract, once again to achieve the company's overseas export of services and technology, looking forward to continuous development.
The new energy business is progressing smoothly. In June 2023, the company cooperated with major shareholder Delun Environment and partner Xiamen Haichen to carry out industrial and commercial energy storage business to create the second growth curve and look forward to the follow-up progress.
Risk tips: project schedule is lower than expected, industry policy changes, etc.