Event description
Yingfeng Environment achieved operating income of 12.256 billion yuan in 2022, an increase of 3.28% over the same period last year, and its net profit was 419 million yuan, down 44.37% from the same period last year. 2023Q1 realized operating income of 2.671 billion yuan, down 5.37% from the same period last year, and its net profit was 156 million yuan, an increase of 10.51% over the same period last year.
Event comment
New energy sanitation equipment has increased rapidly, and sanitation service orders have driven steady growth in revenue. 1) Sanitation equipment: revenue reached 6.08 billion yuan, down 2.05% from the same period last year. The company's total risk of sanitation equipment in 2022 was 13743, down 16.8% from the same period last year (16521 in 2021), mainly due to the impact of sporadic epidemics in various places in 2022. The pressure on local government expenditure has increased, and the procurement of sanitation equipment industry has shown signs of slowing down. However, the number of pure electric sanitation vehicles sold by the company in 2022 was 1369, up 84.01% from the same period last year (744 in 2021), accounting for 29.3% of the market share, ranking first in the industry. the main reason is that local governments have introduced new energy sanitation equipment promotion policies, leading to a high increase in sales.
The relatively high sales price and high sales growth rate of new energy sanitation equipment offset the negative impact of the downward sales of some traditional sanitation equipment on equipment income. 2) Sanitation services, with an income of 4.158 billion yuan, an increase of 37.45% over the same period last year. The company's new orders in 2022 totaled 1.819 billion yuan, ranking first in the industry. The continuous addition of sanitation service projects led to a steady growth of the company's sanitation service business income.
The gross profit margin declined slightly, and the expense rate remained basically stable during the period. The company's comprehensive gross profit margin in 2022 was 22.74%, down 0.70pct from the same period last year, mainly due to the relatively high growth rate of revenue from sanitation services with low gross profit margin, which led to the adjustment of the company's income structure. From a business point of view, the gross profit margin of sanitation equipment was increased to 25.92%, while the gross profit margin of sanitation services decreased by 1.3pct to 15.45%. In terms of expense rate, the expense rate during 2022 was 14.81%, an increase in 0.88pct compared with the same period last year, in which the sales expense rate decreased by 0.02pct to 6.23%, the management and R & D expense rate increased by 0.57pct to 7.75%, and the financial expense rate increased by 0.33pct to 0.83%. Cash flow has increased significantly due to a substantial reduction in cash payments for the purchase of raw materials, assets and credit impairment have an impact on performance. The net cash flow of the company's operating activities was 1.662 billion yuan in 2022, compared with 809 million yuan in the same period last year, with a marked improvement. The main reason is that the cash paid for goods and services decreased by 1.82 billion yuan compared with the same period last year, and the company's income-to-cash ratio was 98% in 2022 (101% in the same period last year). Maintain a healthy level. In 2022, the company set aside 105 million yuan in credit impairment loss and 313 million yuan in asset impairment provision (including 296 million yuan in goodwill impairment), which is a drag on the current profit.
It is expected that the continuous promotion of sanitation services and the growth of new energy sanitation equipment will lead to an improvement in performance. By the end of 2022, Yingfeng Environment has operated a total of 233sanitation service projects, with an annual contract value of 5.525 billion yuan in the stock market and a total contract amount of 42.712 billion yuan to be executed, supporting the improvement of future performance. On January 30, 2023, the Ministry of Industry and Information Technology and other eight departments issued the Circular on organizing the pilot work in the pilot area of the full electrification of vehicles in the public domain, proposing: "start the pilot work in the pilot area of the full electrification of vehicles in the public domain nationwide", requiring that the proportion of new energy vehicles in the pilot areas should strive to reach 80%, and CCER may be introduced to solve the problem of high price of new energy vehicles. It is expected that after the implementation of the pilot policy, new energy sanitation vehicles will fulfill the industry volume logic and will also lead to the improvement of the company's performance.
It is estimated that the net profit from 2023 to 2025 will be 8.9,10.4 and 1.21 billion yuan respectively, corresponding to PE18x, 16x and 14x.
Risk hint
1. The marketization process of sanitation is lower than expected; 2. The competition pattern of new energy equipment is deteriorating.