化债有望改善报表，寻求新业务布局机会。（1）应收改善：公司项目多以政府付费的环保治理项目为主，伴随化债政策加码，将加速应收收回；（2）空间打开：伴随地方政府投融资能力修复，有望进一步在低能级城市招标扩张；（3）新领域布局：根据公司《签署光伏项目投资》与《签署氢能装备项目》相关公告，公司签订乌苏市1GW 光伏发电项目、扬州市氢能装备项目(主营电解槽装备)，将规划多元化业务领域。Core views:
The diverse layout of water affairs and solid waste has maintained a high level of historical performance. During the establishment of the company, leachate treatment was the fulcrum, and then expanded its business into the fields of water and solid waste. Thanks to the high increase in project orders, the company's historical revenue and profit growth performance was impressive. According to Wind, the revenue CAGR for 2019-2023 was about 44.1%, and the net profit CAGR to mother was about 32.9%. Also, in the context of high profits, it can be observed that the share of BOT engineering revenue is gradually increasing, and the accelerated construction of BOT projects contributes to operating profits. In addition, the supercompany continues to sign new orders to maintain the growth in engineering profits and the increase in performance that emerging businesses such as new energy may contribute in the future, and the company's future growth potential can still be expected.
The share of environmental business operations increased, and large orders supported growth in performance. According to the company's annual report, order amounts for the company's franchise projects reached 1.801 billion yuan (+123.6%) and 3.296 billion yuan (+83.0% year over year) in 2022 and 2023 respectively; order amounts for engineering construction projects reached 0.343 billion yuan (+68.7% year over year) and 0.477 billion yuan (+38.8% year over year) in 2022 and 2023, respectively. The two types of orders maintain large double-digit growth, which can support the company's continued high growth in engineering revenue and profit over the next 2-3 years, and continue to contribute operating income even after franchise projects are put into operation.
Debt conversion is expected to improve statements and seek new business layout opportunities. (1) Receipt improvements: Most of the company's projects are mainly environmental protection management projects paid by the government, which will accelerate receivables collection; (2) space opening: with the restoration of local government investment and financing capacity, it is expected to further expand tenders in low-energy cities; (3) New field layout: According to the company's “Signing Investment in Photovoltaic Projects” and “Signing Hydrogen Energy Equipment Projects”, the company will plan diversified business fields.
Profit forecasting and investment advice: large orders support growth and seek new business opportunities. The company's 2024-2026 EPS is expected to be 0.54/0.72/0.94 yuan/share, corresponding PE is 26.56/19.93/15.36 times. The company has had outstanding growth and has benefited from debt conversion. Considering the company's future performance growth rate and the valuation situation of peer companies, the company was given a PE valuation of 28 times in 2024, with a reasonable value of 15.24 yuan/share, and a “buy” rating.
Risk warning. Project commissioning fell short of expectations; performance growth fell short of expectations; accounts receivable risk, etc.
