Event description:
The co-actual controllers of the company, Wang Shuangfei, Song Hainong, Yang Qifeng and Xu Kaishao, intend to transfer 4000 shares (9.85% of the total share capital) to Guanghuan; at the same time, Mr. Wang Shuangfei intends to entrust his 44.99 million shares (11.09% of the total share capital) of the company to Guanghuan, which will lead to a change in the control of the company.
Event comments:
Deepen cooperation with 2020Q3 to enhance financial strength, solid waste layout is expected to accelerate the Guangzhou Investment through a fixed increase of 1275 shares in the company (3.14%), to become the company's second largest shareholder. After this transfer, the proportion of shares held by Guanghuan will reach 12.99%, the proportion of voting rights will reach 24.08%, and will gain control. Guanghuan Investment is a state-owned enterprise in Guangzhou, whose business covers the whole industry chain of solid waste collection, transportation and treatment, and leads the domestic incineration and disposal scale. On the one hand, this transaction will enhance the company's financial strength, on the other hand, it may accelerate the company's layout in the field of solid waste and create a comprehensive environmental protection platform.
Operating income is expected to maintain rapid growth, and cash flow improvement is expected.
In the first half of 2020, part of the company's waterworks, sewage treatment plants and sanitation projects were put into operation one after another, and the operating income increased by 121.89% to 102 million yuan compared with the same period last year. By the end of 2020H1, the company has ordered 1.339 billion yuan in operation. As the project gradually enters the operation stage, the company's operating income is expected to maintain rapid growth and improve the company's cash flow.
Q4 landing 1.15 billion sanitation project, the order on hand is more sufficient.
As of 2020H1, the company has orders on hand of about 9.951 billion yuan. 2020Q4, the company newly signed 1.15 billion sanitation franchise project, the expansion of solid waste field is accelerated, and the order structure is further diversified. In the second half of 2020, the company's new orders totaled 1.45 billion yuan (including consortia). At present, the order on hand is about 11.2 billion yuan, which is relatively sufficient.
Investment rating and valuation: it is estimated that the net profit of 2020, 2021, and 2022 will be 298, 0.26, 395 million respectively, corresponding to EPS 0.73, 0.80, 0.97, and 16-15-12, respectively. The company will be given a "recommended" rating for its first coverage.
Risk hints: the progress of equity transfer is not as expected; the speed of the project is not as expected; the risk of repeated epidemic situation.
