Events:
1. The company won the bid for EPC general contract and operation and maintenance project of Yanghe No.2 Irrigation District, Huailai County, Zhangjiakou City, with a total project amount of 314 million, the project operation mode is EPC+O (project general contract + operation), and the project operation and maintenance period is 10 years after the completion and acceptance of the contract (excluding 28 months of construction period). The contents of this project are as follows:
The comprehensive water-saving reconstruction project of Yanghe No.2 Irrigation District in Huailai County, Zhangjiakou City, involves three towns of Xinbao, Dahuangzhuang and Xibali, and two townships of Jimingyi and Dongbali, with a total of 35 administrative village streets. The project transformed 82000 mu of water-saving irrigation area, including 15000 mu of high-efficiency water-saving irrigation area and 67000 mu of conventional canal irrigation area.
2. Huitu Science and Technology won the bid for the construction and operation and maintenance project of rural drinking water intelligent metering facilities in Yanqing District, Beijing, with a winning bid amount of 56.33 million yuan, which includes the project construction fee and annual operation and maintenance fee. the actual amount of the project is nearly 80 million yuan. On June 30, 2020, Dayu Water-saving announcement increased its capital and subscribed 43.2128 million newly issued shares to Beijing Huitu Science and Technology Co., Ltd with its 100% equity stake in Yunnan Dayu Water-saving Co., Ltd., with a total shareholding ratio of 29.49%.
The company has continuously won large orders, proving the company's leading strength, and the company may enter a rapid development period of Zhangjiakou project construction covering efficient water-saving irrigation, ecological management, information construction and operation and maintenance service management after the completion of each project. it comprehensively covers the scope of the company's main business, which is another verification of the company's comprehensive strength.
If the project is successfully implemented after winning the bid, it will effectively enhance the company's market influence in the Yongding River basin, and also make the company's EPC+O model effectively promoted and copied in the transformation of modern irrigation areas.
The project construction in Yanqing District is tendered for the integration of construction and 8-year operation and maintenance, which changes the previous problems of emphasizing construction over management and ensuring the long-term and stable operation of the project. Winning the bid is another affirmation of the strength and advantages of Huitu Technology in the field of rural drinking water. In the future, Huitu Science and Technology will continue to make efforts in this field, complete the project construction with high quality and high efficiency, further speed up the construction of "digital water conservancy" in the capital, and help improve the information level of rural drinking water.
We believe that the winning bid of these two projects proves the company's leading competitiveness in the industry, and that the company has formed an effective development model in the field of irrigation and water conservancy construction and intelligent water conservancy. We expect that with the vigorous promotion of the national rural revitalization policy, the company is expected to enter the fast lane of development.
Short-term affected by the COVID-19 epidemic performance decline, is expected to usher in the third quarter inflection point in the first quarter, affected by the epidemic, the company's project progress is not up to expectations, resulting in a decline in performance. With the control of the epidemic, the company's business is expected to recover quickly, superimposed the company's orders continue to increase, we expect the company's performance in the third quarter is expected to usher in a significant inflection point.
Give a "buy" rating:
It is estimated that from 2020 to 2022, the company will achieve an income of 27.30, 33.95, and 4.113 billion, an increase of 26.07%, 24.35, 21.14%, 1.81, 2.45, 331, and 40.03%, 35.10, 35.09%, respectively, with a corresponding EPS of 0.23, 0.311, 0.41 yuan and 21x/16x/12x, respectively. Taking into account the company's broad space for development and steady growth in performance, continue to give a "buy" rating!
Risk tips: national policy changes, natural disasters, order landing is not up to expectations