23H1's performance is solid and its cash flow has improved significantly. The company released the mid-2023 report: 23H1 achieved revenue of 3.236 billion yuan (year-on-year + 17.50%), net profit of 594 million yuan (year-on-year + 2.09%), Q2 revenue of 1.716 billion yuan (year-on-year + 9.83%), and net profit of 287 million yuan (- 19.66%). The decline in Q2 net profit is mainly due to the concentrated production of 22Q2 projects, and the higher recognition of project revenue and gross profit leads to a high base. In addition, 23H1 increased about 700 million yuan in accounts receivable at the end of the year compared with 22, mainly due to the increase in state and provincial subsidies, and the overall recovery risk is smaller. The cash flow of 23H1 Company has improved significantly, with the net operating cash flow reaching 694 million yuan (+ 79.77% compared with the same period last year).
Solid waste accounts for nearly 93% of transportation projects, and attention is paid to the revaluation potential of high-quality operating assets. According to the China report, as of 23H1's incineration capacity of hand-held waste, 28550 tons / day, of which 26450 tons / day is being transported; 23H1's garbage storage volume / on-line electricity consumption is + 21.50% and 15.11% compared with the same period last year. Looking to the future: (1) 2100 tons / day under construction is expected to be put into operation by the end of 23; (2) using waste heat to provide steam, leachate treatment and other steam services to improve profitability; (3) sanitation, hazardous waste, medical waste upstream and downstream continuous expansion.
Highway + water laid a solid foundation, people's livelihood rigid demand + franchise + profits and cash flow sound. The company has high-quality operating assets (high speed + water) and three characteristics of "rigid demand for people's livelihood + franchise + stable income / cost". Cash flow is robust: according to the China News, (1) high speed: the average daily vehicle flow of 23H1 significantly recovers (year-on-year + 26.6%), achieving revenue of 715 million yuan (year-on-year + 6.0%); subsidiary Xu Pingnan high-speed net profit of 260 million yuan (year-on-year + 9.1%). (2) Water supplies: 23H1 achieved revenue of 140 million yuan (year-on-year + 30.3%); as of 23H1, there are no projects under construction, and there are 5 projects under construction in transport and sewage treatment.
Profit forecast and investment advice. It is estimated that the net profit of homing in 23-25 years will be 1.48 billion yuan for 1.38 billion yuan for 1.36 pound and 4.8 times for PE. High-quality public utility operators, asset revaluation potential is outstanding, with reference to the industry to give 23 years of 11xPE, fair value of 21.09 yuan / share, maintain the "buy" rating.
Risk hint. The progress of construction is low and expected; the rate of return of new projects is declining; the risk of subsidy and so on.