The company achieved revenue / return net profit / deducted non-return net profit of 38.69 million yuan in 2020, compared with the same period last year. The net profit of return to the mother exceeded the performance commitment of medium energy conservation acquisition (326 million yuan). The non-recurrent profit and loss were mainly government subsidies, which were-7%, 2%, 6%, and 6%, respectively, and the non-recurrent profit and loss were mainly government subsidies, while the net profit of return to the mother exceeded the performance commitment at the time of medium energy-saving acquisition (326 million yuan). The decline in revenue from the same period last year was mainly due to the epidemic situation affecting the progress of project construction, with project revenue decreasing by 29% compared with the same In December 2020, China Energy Saving has completed its holding, and the synergy effect is expected in the future. We estimate that the company's EPS for 21-23 will be 0.57, 0.70, and 0.81 yuan. We will give the company a target price of 8.55 yuan corresponding to the 21-year 15x target PE, and maintain the "overweight" rating.

The proportion of operating income rose to 47% in 2020, and the comprehensive gross profit margin increased year on year. 4.5pct achieved revenue of 3.869 billion yuan in 2020,-7% year-on-year, of which 1) engineering revenue was 1.851 billion yuan,-29% year-on-year, dragging down total revenue. 2) operating income 1.808 billion yuan, year-on-year + 31%, revenue share increased 14pct to 47% year-on-year, the company's "light asset operation" scale further expanded, driving the comprehensive gross profit margin increased to 29.4% year-on-year 4.5pct 3) equipment sales revenue of 198 million yuan, + 8% year-on-year. During 2020, the expense rate increased from 2.5pct to 17.3% compared with the same period last year, mainly because the project was completed and put into operation one after another, and the project loan interest changed from capitalization to expense, resulting in the financial expense rate + 2.4pct compared with the same period last year. In 2020, the company accelerated the payback and optimized the payment. The operating net cash flow reached 868 million yuan, + 8% compared with the same period last year, and the cash flow further improved.

In December 2020, China Energy Conservation (unlisted) completed its equity transfer with Guozhen Group (unlisted), and the proportion of voting shares held by China Energy Saving Capital (unlisted) was 29%. The controlling shareholder of the listed company was transformed into China Energy Saving, and the actual controller was the State-owned assets Supervision and Administration Commission of the State Council. China Energy Saving is the only central enterprise in China that focuses on energy conservation and environmental protection. Energy conservation Guozhen is expected to give full play to the resource advantages and financing channel advantages of controlling shareholders in the future, combined with the original operating efficiency of the company, the synergy effect can be expected.

New orders dropped sharply in 2020, maintaining the "overweight" rating. In 2020, the company increased engineering / operation orders by 1.233 billion yuan, which was-59% more than the same period last year. 62%. The superimposed epidemic affected the progress of project construction. We reduced our revenue forecast for 21-22 years. At the same time, the company's gross profit margin increased significantly in 2020. Accordingly, we increased the gross profit margin for 21-22 years. It is estimated that the net profit of homing in 21-23 years will be 402x563 million yuan (before 21-22: 423,000,000 yuan), and the corresponding EPS is 0.57 Wind 0.70max 0.81 yuan. With reference to the average value of the company's 21-year Wind consensus expectation of 15x, the company will be given a target price of 8.55yuan (previous value: 10.30yuan) corresponding to the company's target PE, in the 21st year to maintain "increasing holdings".

Risk hint: the progress of the project is not as expected, the financing environment is deteriorating, and the income is lower than expected.