Incident: On February 28, 2024, the company issued the “Notice on the Company's Share Repurchase Plan”. The company plans to repurchase the company's shares using its own capital of 5500-110 million yuan and IPO overraised capital at a repurchase price of no more than 22.80 yuan/share. The repurchase of all shares will be cancelled and the company registration costs will be reduced accordingly.
Actively implement share repurchases and increase holdings, demonstrating the company's confidence in development. Based on the current repurchase bill of 5500-110 million yuan and the maximum repurchase price of 22.80 yuan/share, it is estimated that the number of shares to be repurchased is 241.23-4.824,600 shares, accounting for 0.99%-1.98% of the company's current total share capital. Cancellation after share repurchase is conducive to increasing earnings per share and share price, thereby increasing investors' income. On February 6, 2024, the company issued the “Proposed Notice on Receiving Proposals from the Actual Controller, Chairman and General Manager to Repurchase the Company's Shares”, which plans to repurchase the company's shares by 25 to 50 million yuan, and the repurchase capital amount will be increased by 120% after the repurchase bill is passed. Meanwhile, on December 19, 2023, the company issued a “Notice on the Company's Actual Controller's Share Increase Plan”. Mr. Chen Jianxiang, the company's actual controller, plans to increase the total amount of shares of the company by 2 to 4 million yuan within 6 months, ending February 6, 2024 Japan has increased its holdings of the company's shares by 138,000 shares through centralized bidding, which has reached and exceeded 100% of the minimum amount of the plan to increase its holdings. A series of repurchases and increases in the company's holdings have sent a positive signal of confidence in future development.
Continue to gather the main organic solid waste industry and actively promote the biodiesel business. The company continues to focus on the harmless treatment and resource utilization of urban domestic waste. On October 11, 2023, the company won the bid for the Beijing Tongzhou District Organic Waste Recycling Project, with a total investment of 1,678 billion yuan, including general construction contracting costs of 1,340 million yuan and a cooperative operation period of 30 years (construction period 2 years). It will become another major benchmark project for the company to launch after Shenzhen, Guangzhou, Zhongshan, etc.; on February 7, 2024, the company won the bid for equipment supply services for the Beijing Shougang Food Waste Resource Utilization Project, with a bid amount of 255 million yuan. Delivery will be completed within 180 days of signing the contract. The implementation of the above projects will all have a positive effect on the company's performance. At the same time, the company is actively developing the biodiesel business based on the advantages of operating its own waste treatment projects. Since October 2023, it has successively signed strategic cooperation framework agreements with Rui Maotong, Sinopec CNOOC Marine Fuel, and South China Petroleum International, and will actively cooperate in the fields of SAF, UCO, and biological marine fuel.
Profit forecast: Maintain the company's “gain” rating. The profit forecast was adjusted according to the company's latest quarterly report. The company is expected to achieve operating income of 1,705/18.46/2,058 billion yuan in 2023-2025, and net profit to mother of 1.94/2.45/319 million yuan. The corresponding PE is 20.27x/16.07x/12.33x, respectively.
Risk warning: Changes in the macroeconomic situation at home and abroad have exceeded expectations, the implementation of fund-raising projects has fallen short of expectations, biodiesel price spreads fluctuate, and profit forecasts and valuation models fall short of expectations