Main points:
The ownership structure is stable, the loss-making business is spun off, and the operating situation is greatly improved. 1) Shanghai Zhongchuang has entered the main company and its equity is stable. Shanghai Zhongchuang currently holds a 19.96% stake in the company. Qiu Guoqiang, the company's second largest shareholder, signed a "voting entrustment agreement" with Shanghai Zhongchuang, which currently holds 29.93% of the company's voting rights. At the same time, Qiu Guoqiang has signed a "share transfer agreement" with Zhongchuang Zunghui (Shanghai Zhongchuang Zunhui's wholly-owned subsidiary), and the share transfer procedures are under way. 2) spin off the loss-making business, and the company's performance has greatly improved. In 2019, the company spun off Xiamen Porting in the way of asset exchange, put it into Xiangsheng, Jiangxi Province, entered the hazardous waste treatment industry, and emptied the equity of Beijing Luoka.
In 2020, the company's operating income was 1.824 billion yuan, an increase of 23.63% over the same period last year, and a net profit of 20.9359 million yuan was turned into a profit. In the case of stripping off the trade sector, 2021Q1 achieved an operating income of 293 million yuan, an increase of 3.03% over the same period last year, and a net profit of 12.2076 million yuan.
Filter media industry leader, industrial filter media revenue gross profit margin is stable, relying on the accumulation of technology to open up the civilian market. In the high temperature flue gas treatment industry, the company ranks among the top two in the electric power industry and the top five in the non-electric field by virtue of its technology and brand advantages. From 2017 to 2020, the company's filter media sector achieved income of 2.97,3.18,3.59 and 300 million yuan respectively, with a gross profit margin of 26.21%, 29.51%, 29.94% and 29.15%, which was higher than that of A-share listed companies 4-5Pct. At present, the traditional filter media industry has entered the bottleneck of the industry and the competition is fierce. The company relies on the accumulation of technology to develop air purification and water treatment products. Under the background of COVID-19 epidemic situation, the company aims at the pain points in the market and develops large-scale air purification products capable of high-temperature infrared disinfection, which can achieve a broad-spectrum disinfection efficiency of 99.99%. At the same time, the filter material can be reused, which can greatly reduce the later cost compared with the products on the market. In the field of water purification, the company has completed the technical reserve of four application scenarios: domestic sewage, industrial sewage, rural sewage and Haikou treatment. The company's air purification products are expected to achieve rapid growth in the future.
Hazardous waste treatment continues to expand production, and is expected to achieve double increases in revenue and gross profit in 2021. At present, the approved scale of hazardous waste disposal of Jiangxi Xiangsheng Environmental Protection subsidiary is 50,000 tons / year. The construction project of Zhong Chuang Ruiping cement Kiln for coordinated disposal of solid waste has been approved by EIA and is currently under construction and is expected to be completed in 2021 with a hazardous waste treatment capacity of 60,000 tons per year. The comprehensive utilization project of precious metals in Jiangxi Neihua is under construction and is expected to be put into production in the fourth quarter of this year, including a production capacity of 3000 tons per year for hazardous waste treatment of precious metals. Zhongchuang Guwei Huazhou District, Weinan City, Shaanxi Province, the project of resource utilization and disposal of industrial waste is in the project planning stage, with a construction scale of 100,000 tons per year. By the end of 2021, the actual production capacity of hazardous waste disposal will reach 113,000 tons / year. Affected by the epidemic and certificate replacement, Xiangsheng, Jiangxi Province, handled 14647.21 tons of hazardous waste in 2020, down 62% from the same period last year. The company's hazardous waste disposal business returned to normal in 2021 and is currently in hand with 40350 tons of hazardous waste disposal orders.
At the same time, the gross profit margin of the company's hazardous waste disposal business in 2020 is 14.74%, which is far lower than the level of the industry. According to the experience of Xiangsheng in Jiangxi Province from 2016 to 2019, the gross profit margin is 25% 30%. As the company returns to normal, the gross profit margin in 2021 is expected to be repaired.
The sanitation integration plate adopts the misplaced competition strategy and lays out the upstream sanitation equipment.
The company regards the sanitation integration plate as the core map of future growth. At present, the total price of the order on hand is 104.94 million yuan, and the annual service amount is 34.98 million yuan. The company adopts misplaced competition strategy, aiming at the second-tier and below urban sanitation integrated market. At the same time, invest in Xunyang Baotong, get involved in the production and manufacture of upstream sanitation vehicles and sanitation equipment, and achieve upstream and downstream coordination, which will help the company to reduce costs and improve operational efficiency.
Investment advice:
We expect the company's net profit from 2021 to 2023 to be 0.80max 1.59 / 187 million yuan and EPS 0.21max 0.41 Universe 0.49 yuan respectively, and the current share price corresponding to Pamp E is times that of 30-15-13. At present, the median TTM of environmental protection engineering and service industry is 20 times, considering that the company's hazardous waste disposal capacity will be released in 2021-2022; the integrated sanitation business will be further expanded; the domestic epidemic situation has been basically controlled, the filter media plate business will be repaired, and the future income will remain stable; many technical advantages of air purification products will provide new power for the company in the future. A certain premium can be given. For the first time, we have given it an "overweight" investment rating.
Risk Tips:
Outstanding litigation compensation risk; accounts receivable recovery risk; inter-industry competition risk; business development is not as expected; raw material supply and price change risk.