The transformation from atmosphere to solid waste will open a new chapter in development. Yongqing Environmental Protection was founded in 2004, formerly known as Hunan Yongqing Environmental Desulfurization Co., Ltd., the company started with atmospheric control business, with the atmospheric control market space saturated, the company actively transformed, focusing on the development of soil remediation, waste incineration, hazardous waste treatment and other high-prosperity solid waste business Now it has formed a business combination model with the combination of light and light assets, steady cash flow and profits (solid waste operation), engineering flexibility and rapid growth potential (soil remediation), and comprehensive technical service capability (EIA consultation). To create a highly competitive comprehensive environmental protection platform.
The domestic soil remediation market is more than 10 billion yuan, and the company is expected to benefit from the leading business. The stable period of soil remediation in the United States accounts for about 5.5% of the total investment in environmental protection. At present, domestic investment in soil remediation accounts for about 1-2% of the total investment in environmental protection, and there is huge room for growth. The soil pollution Prevention and Control Law was implemented in January 2019. As a Chinese version of the "super fund", the law defines the regulators, responsible parties and sources of funds, and the accelerated release of the soil remediation market, with a market space of more than 10 billion yuan. The company has mature soil remediation core engineering technology, leading technical research and development capabilities, a complete series of remediation agents and rich project experience, and is at the first echelon level of the soil remediation industry. solid technology, rich project experience, accelerated landing of orders since 2020, the company is expected to continue to benefit from the industry dividend.
Layout of high-prosperity waste incineration-hazardous waste business, the performance is expected to continue to release. According to the plans issued by the provinces, it is estimated that 17 provinces will put into production and incineration capacity of 6.03 million tons per day, with a corresponding investment of 321.3 billion yuan, and the prosperity of the waste incineration industry will continue in the future. The company has wholly owned two waste incineration power generation projects in Hengyang and Xinyu with a total of 1600 tons per day. The second phase of the project is actively under way, and the business income of waste power generation has continued to grow in the past two years. In addition, the company actively acquires high-quality and hazardous waste assets, the Gansu Hexi 33400-ton hazardous waste disposal project in 2018, and the 38000-ton Kangbo solid waste equity project in 2020. Kangbo solid waste is located in Jiangsu, a major province of dangerous waste, with good location advantages. and its hazardous waste team has high comprehensive quality and rich operation experience, the company hopes to rely on Kangbo to continue national integration in the future.
After the pain of deleveraging and management change, the company is expected to return to the track of high-quality development. The company experienced deleveraging crisis in 2018, and the management experienced turbulence, and the performance fluctuated greatly. Since 2019, monetary policy has been sound and loose, and financing easing has helped the company's development. And the new management is active and promising, young and energetic, the chairman of the board of directors has rich experience in the environmental protection industry, and the company is expected to return to the high-quality development path again by implementing the "engineering + operation" development strategy.
Profit forecast: the company leads the soil remediation business, accelerates the landing of orders, accelerates the release of orders under the background of the soil pollution prevention law and the second national survey of pollution sources, and accelerates production with many high-quality projects of hazardous waste and waste incineration. We estimate that the return net profit of the company from 2020 to 2022 will be 0. 5max. 1. 1100,000,000, EPS is 0. 07max, and EPS is 0. 17max. The corresponding PE is 116.0X/48.1X/29.1X, which is covered for the first time and given a "hold" rating.
Risk hint: the landing of soil remediation order is lower than expected, and the follow-up development progress of incineration-hazardous waste is lower than expected.
