On November 2, 2023, the company received the controlling shareholder Zijin Mining's “Notice on Increasing the Holding of Longjing Environmental Protection Shares”. Zijin, a wholly-owned subsidiary of Zijin Mining, the controlling shareholder, increased its holdings by a total of 1,495 million shares from October 26 to November 2, 2023, accounting for 0.1383% of the company's total share capital. Currently, Zijin Capital and Zijin Investment collectively hold 1.0021% of the company's total share capital.
Commentary:
Maintain the “Overweight” rating. We maintain our predicted net profit for 2023-2025 at 1,364, 17.98, and 2,341 billion yuan, corresponding to EPS of 1.26, 1.67, and 2.17 yuan, respectively, and maintained the target price of 28.89 yuan, maintaining the “increase in holdings” rating.
The controlling shareholder's continued increase in holdings shows confidence. 1) After this increase in holdings, Zijin Mining and its wholly-owned subsidiaries held a total of 17.142 million shares of the company, accounting for 15.86% of the company's total share capital; they controlled a total of 27.854 million voting shares of the company, accounting for 25.76% of the company's total share capital. 2) Zijin Mining is determined to turn Longjing Environmental Protection into its mining green energy platform, and its continuous increase in holdings shows confidence.
The green power and new energy business is progressing on schedule and in an orderly manner. 1) In terms of landscape business, the company has now completed the target registration of about 2 GW of projects, and is currently proceeding with construction of nearly 1 GW. 2) In terms of energy storage business:
① The Longjing Honeycomb Energy Storage Battery PACK and System Integration Project was completed and put into operation on August 28, 2023, and the new energy storage contract has reached 1,245 billion yuan; ② The 5GWH lithium iron phosphate energy storage cell project plant in Shanghang County has been capped and is about to enter the equipment installation stage. 3) The company's new energy business has developed smoothly. It will continue to rely on the controlling shareholders' mining application scenarios to vigorously promote mining, smelting, wind, storage and clean energy businesses, and actively promote technology research and development in fields such as green microgrids.
Traditional environmental protection business orders are sufficient, and the fundamentals are stable. Under the trend of increasing new installed capacity for coal power, the company's dust collector business-related orders grew significantly in the first three quarters of 2023. The company added 7.9 billion yuan in construction contracts in the first three quarters and 19.9 billion yuan in on-hand construction contracts at the end of the period. Abundant on-hand engineering contracts have laid a solid foundation for the continuous and steady growth of the company's performance.
Risk warning: Flue gas equipment sales, solid and hazardous waste project management, new energy business expansion falling short of expectations, etc.