维持“增持”评级 。我们维持对公司2023-2025 年预测净利润分别为19.60、21.84、23.13 亿元，对应EPS 分别为0.41、0.45、0.48 元。公司积极拓展全国业务，昆明资产包已完成六座运营交接工作，同时公司第六期污水结算价格进入新周期在即，维持目标价6.86 元，维持“增持”评级。Introduction to this report:
Revenue for the first three quarters of 2023 increased 7% year on year. The depreciation and amortization of assets and the decline in water supply and installation business led to a decline in attributable net profit. The company's Kunming asset package has been handed over to six purification plants. At the same time, it is expected that a new price adjustment cycle will be ushered in, and growth can be expected.
Key points of investment:
Maintain the “Overweight” rating. We maintain our forecast net profit for 2023-2025 of 19.60, 21.84, and 2,313 billion yuan respectively, corresponding to EPS of 0.41, 0.45, and 0.48 yuan, respectively. The company is actively expanding its business across the country. The Kunming Asset Package has completed the handover of six operations. At the same time, the company's sixth phase sewage settlement price is about to enter a new cycle, maintaining the target price of 6.86 yuan and maintaining the “increase in holdings” rating.
The performance was generally in line with expectations. 1) The first three quarters of 2023 achieved operating income of 5.799 billion yuan, a year-on-year increase of 6.68%; imputed net profit of 1,443 billion yuan, a year-on-year decrease of 14.30%. The reasons for the decline in attributable net profit are: ① Depreciation and amortization of water supply and drainage assets increased by 184 million yuan year on year; ② water supply enterprise user installation business profit decreased by 71.77 million yuan year on year. 2) 2023Q3 had quarterly revenue of 2.101 billion yuan, up 5.92% year on year; imputed net profit was 731 million yuan, down 2.37% year on year. Credit impairment losses improved quarter by quarter, Q3 fell 21% month on month, and the year-on-year decline in the company's attributable net profit for a single quarter narrowed quarter by quarter.
The price of the sixth phase of sewage treatment services has been approved by the Chongqing Municipal Finance Bureau, and a new cycle of price adjustments is imminent.
The company has entered the sixth settlement period for sewage treatment services (that is, from January 1, 2023 to December 31, 2025). The Chongqing Municipal Finance Bureau began the sixth settlement price approval in December 2022, which is still being approved. The price of phase 5 sewage treatment service was approved in September of the year following acceptance and approval (that is, the first year of phase 6). We believe that the price of phase 6 service will soon enter a new cycle of price adjustment.
Actively expanding national business, we have completed the handover of operations of six water quality purification plants in Kunming's nearly 4 billion asset package. In November 2022, the subsidiary Kunming Yurun Water acquired the assets of seven water purification plants in Kunming for 3,947 billion yuan and actively expanded the national business. As of September 2023, a total transaction price of 2,262 billion yuan has been paid, and the handover of production and operation of six water purification plants has been completed.
Risk warning: Pharmaceutical price fluctuations, electricity price fluctuations, industry policy changes, etc.
