Core ideas:
In the third quarter alone, the performance increased by 30% compared with the same period last year, and the cash flow remained stable. The company released three quarterly reports, with revenue of 4.539 billion yuan (year-on-year + 6.52%) and net profit of 985 million yuan (year-on-year + 14.47%) in the first three quarters, including operating income of 1.559 billion yuan (+ 11.05%) and net profit of 352 million yuan (+ 30.02%) in the third quarter. The significant increase in profits was mainly due to the inclusion of renewable energy subsidy projects in the fourth quarter of last year and the year-on-year decline in operating costs of some projects.
In the first three quarters, the company achieved a net operating cash flow of 1.103 billion yuan, showing excellent hematopoietic ability.
The operating income of the project has increased steadily, and the power generation efficiency has led the industry. By the end of 2023H1, the company's holding and shareholding capacity has reached 40 million tons / day and 15 million tons / day respectively, and the holding and equity participation / preparation capacity is 0.45 million tons / day and 0.26 million tons / day respectively. With the production capacity put into production, 2023H1 achieved project operating income of 1.781 billion yuan (year-on-year + 13.7%). Among them, waste disposal and power generation reached 6.81 million tons (+ 12.6% compared with the same period last year) and 2.703 billion degrees (+ 11.8% compared with the same period last year), respectively, which are the main driving forces of the company's performance growth after excluding subsidies. In addition, the power generation access rate of 2023H1 also increased to 88.3% compared with the same period last year, continuing to maintain a leading level in the industry.
"Repurchase + increase" shows business confidence and attaches importance to undervaluing investment potential. (1) the company plans to buy back shares through centralized bidding transactions within 12 months, and the repurchase amount is about 0.5 billion yuan; (2) the company issues a plan to increase the shares held by indirect controlling shareholders. "Water Affairs Environment", the indirect controlling shareholder of the company, intends to increase its holdings of the company through bulk trading or centralized bidding within 12 months, with a cumulative increase of about 0.5 billion to 1.0 billion yuan. With the continuous improvement of the company's operating cash flow and the rapid contraction of capital expenditure, we can look forward to the layout potential of subsequent mergers and acquisitions, expansion, dividends and so on.
Profit forecast and investment advice. It is estimated that the company will achieve net profit of 13.12,15.20 and 1.755 billion yuan respectively from 2023 to 2025, corresponding to the latest PE of 9.28,8.02,6.94 times respectively. With reference to the comparable company valuation, the company will be given 15 times PE valuation in 2023, corresponding to the reasonable value of 11.73 yuan per share, and maintain the "buy" rating.
Risk hint. The project construction is low expected; the overseas expansion is not as expected; the state reimbursement is low expected, and so on.