Dongjiang Environmental Protection (00895.HK): the epidemic situation and intensified competition lead to a 28% decline in net profit and look forward to the further operation of qualifications in the future.

中金公司 · Mar 30, 2021 00:00

2020 业绩低于我们预期

公司公布2020 业绩：收入33.15 亿元，同比减少4.15%；归母净利润3.03 亿元，对应每股盈利0.34 元，同比减少28.49%，低于我们预计。我们认为业绩下滑主要由于疫情导致行业需求减少，且公司计提商誉及应收账款减值合计0.8 亿元所致。

危废处置业务盈利能力下滑，主要由于：1）受疫情影响，上下游企业开工减少导致危废处置量下滑；2）行业产能投产导致竞争加剧，资源化处置业务成本上升以及无害化处置价格下滑。分业务来看：公司资源化业务实现营收10.5 亿元，同比下滑1.95%，毛利率同比减少3.2ppt 至20.0%，无害化业务实现营收16.0 亿元，同比下滑4.05%，毛利率同比减少1.3ppt 至49.1%。

期间费用率下滑0.6ppt 至21.2%，其中销售费用率管控良好，同比下滑0.5ppt 至3%，财务费用率同比下滑0.5ppt 至3.6%。公司经营性现金流同比减少21.1%至9.74 亿元，主要由于2019 年收到专项环保资金4.4 亿元，而2020 年无此项所致。

发展趋势

在手产能充足，持续扩大危废行业布局。目前公司已投运产能资质为202 万吨/年，储备产能接近40 万吨，报告期内公司资质利用率仅41%（资源化、焚烧、填埋、物化分别为42.6%、60.2%、67.5%、18.3%），未来产能利用率有进一步提升空间。报告期内，公司持续开拓危废业务，拟现金收购郴州雄风环保70%股权，雄风环保主要从事有色金属资源综合回收业务，产能约13 万吨。我们认为公司收购雄风环保有助于公司完善产业链布局、拓宽业务范围，有利于公司在危废领域持续开拓，我们期待公司在手资质逐步投运带动未来公司业绩的稳定增长。

公司拟定增，若顺利落地有利于公司长期发展。报告期内公司公告筹划非公开发行A 股股票，当前相关事宜还在论证过程中，尚存在不确定性。截至2020 年底，公司负债率48.5%，我们认为如果定增顺利落地有利于提升公司资金实力，优化公司资本结构，有利于未来公司的长期发展。

盈利预测与估值

考虑到市场竞争有所加剧，我们下调公司2021 年净利润12%至4.93 亿元，引入2022 年净利润5.58 亿元，A 股当前股价对应15.5/13.7 倍2021/2022 年市盈率。下调A 股目标价8%至11.8 元，对应2021/2022 年21.1/18.7 倍市盈率，维持跑赢行业评级，较当前股价有36%的上行空间。港股当前股价对应8.2/7.3 倍2021/2022年市盈率，下调目标价12.5%至7 港元，对应2021/2022 年10.5/9.3倍市盈率，有30%的上行空间，维持跑赢行业评级。

风险

应收账款减值风险，危废处置价格下降风险，项目推进风险。

2020 performance is lower than we expected.

The company announced 2020 results: revenue of 3.315 billion yuan, a decrease of 4.15% compared with the same period last year; net profit of 303 million yuan, corresponding to 0.34 yuan per share, a decrease of 28.49% compared with the same period last year, which is lower than our forecast. We believe that the decline in performance is mainly due to the reduction in industry demand as a result of the epidemic and the company's provision of goodwill and impairment of accounts receivable totaling 80 million yuan.

The decline in the profitability of hazardous waste disposal business is mainly due to: 1) due to the impact of the epidemic, the reduction of upstream and downstream enterprises leads to a decline in hazardous waste disposal; 2) the industry capacity put into production leads to intensified competition, resource disposal business costs rise and harmless disposal prices decline. From a business point of view: the company's revenue from the resource business was 1.05 billion yuan, down 1.95% from the same period last year, the gross profit margin was reduced by 3.2ppt to 20.0% from the same period last year, the revenue from the harmless business was 1.6 billion yuan, down 4.05% from the same period last year, and the gross profit margin decreased by 1.3ppt to 49.1% from the same period last year.

During the period, the expense rate fell 0.6ppt to 21.2%, of which the sales expense rate was well controlled, falling 0.5ppt to 3% year-on-year, and the financial expense rate fell 0.5ppt to 3.6% year-on-year. The company's operating cash flow decreased by 21.1% to 974 million yuan compared with the same period last year, mainly due to the receipt of 440 million yuan in special environmental protection funds in 2019, but not in 2020.

Trend of development

In the hand production capacity is sufficient, continue to expand the layout of hazardous waste industries. At present, the company has put into operation capacity qualification of 2.20 million tons / year, reserve capacity of nearly 400000 tons, and the utilization rate of the company's qualification during the reporting period is only 41% (42.6%, 60.2%, 67.5% and 18.3% respectively for resource utilization, incineration, landfill and physicochemical). There is room for further improvement in the future capacity utilization. During the reporting period, the company continued to develop hazardous waste business and planned to acquire 70% of Chenzhou Xiongfeng Environmental Protection in cash. Xiongfeng Environmental Protection is mainly engaged in the comprehensive recovery of non-ferrous metal resources, with a production capacity of about 130000 tons. We believe that the acquisition of Xiongfeng environmental protection will help the company to improve the layout of the industrial chain, broaden the scope of business, and help the company to continue to develop in the field of hazardous waste. We look forward to the gradual operation of the company's qualifications to drive the steady growth of the company's performance in the future.

The company plans to increase, if the smooth landing is conducive to the long-term development of the company. During the reporting period, the company announced the planning of a non-public offering of A-shares, the current related issues are still in the process of argumentation, there is still uncertainty. By the end of 2020, the company's debt ratio is 48.5%. We believe that if the fixed increase lands smoothly, it will help to enhance the company's financial strength, optimize the company's capital structure, and be conducive to the long-term development of the company in the future.

Profit forecast and valuation

Taking into account the intensification of market competition, we reduce the company's 2021 net profit by 12% to 493 million yuan and introduce a 2022 net profit of 558 million yuan. The current share price of A shares corresponds to the price-to-earnings ratio of 15.5 pounds 13.7 times 2021 pounds. The A-share list price will be lowered by 8% to 11.8 yuan, corresponding to the price-to-earnings ratio of 21.1 times earnings in 2021 and 2022, maintaining an outperforming industry rating, with 36% upside compared to the current stock price. The current price of Hong Kong stocks corresponds to a price-to-earnings ratio of 8.2gamma to 2021x2022, with a target price of 12.5% to HK $7, and a price-to-earnings ratio of 10.5% to HK $9.3 in 2022, with 30% upside space, maintaining an outperforming industry rating.

Risk

The risk of impairment of accounts receivable, the risk of decline in the price of hazardous waste disposal, and the risk of project promotion.

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东江环保(00895.HK)：疫情、竞争加剧致净利润下滑28% 期待未来资质进一步投运

Dongjiang Environmental Protection (00895.HK): the epidemic situation and intensified competition lead to a 28% decline in net profit and look forward to the further operation of qualifications in the future.

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