Conclusions and suggestions:
The company today issued a 17-year performance forecast, which is expected to achieve a net profit of 218 million yuan to 254 million yuan, a year-on-year increase of 55% to 80%. In a single quarter, company 4Q is expected to make a profit of 14 million yuan to 50 million yuan, an increase of 161% over the same period last year (a loss of 23 million yuan in the same period last year). The significant increase in performance was mainly due to the implementation of domestic and international projects as scheduled, the completion of a certain amount of work and the recognition of income. Not only the company's recent good news, but also successively won the bid: 1.16 billion yuan PPP project in Qinyang City, 1.28 billion yuan PPP project in Cao County, Shandong Province, 490 million yuan water supply project in Heilongjiang, 330 million PPP project in Kunming, etc., showing the company's extremely strong ability to take orders, with rich orders, the company's future performance is expected to maintain high growth.
It is estimated that the company's 17-19 net profit will be 2.39,3.42 and 464 million yuan, and the YOY+69.31%, 43.51% and 35.52 PE26X EPS will be 0.36,0.51,0.69 yuan respectively. The current stock price corresponds to the dynamic PE26X, 18x and 13x in 17-19 years. The company's business expansion is sustainable and its future rapid growth has high certainty, so it is given "buy".
Advice.
Two large PPP projects exceeding 1 billion yuan have been awarded successively: the total investment of the PPP project for upgrading and upgrading the urban road network in Qinyang, Henan Province is 1.16 billion yuan, including the construction of roads and supporting facilities, the intelligent transportation upgrading of the urban road network, the construction of urban LED electronic display public service advertisements, and the construction of urban sanitation infrastructure. The whole project cooperation period is 18 years, including 3 years of construction and 15 years of operation. The total investment of the PPP project in Cao County, Shandong Province is 1.28 billion yuan, covering a total area of 2145 mu. Among them, the park is 1535 mu (including water surface 555 mu), the school land area is 269mu, the road land area is 341mu, the operation period is 15 years, divided into 2 years construction, 13 years operation. Winning two large PPP projects in succession shows that the company has a strong ability to take orders in the PPP market, and lays a solid foundation for the further development of Henan and Shandong local markets.
The stock ownership incentive plus employee stock ownership plan shows confidence in future development: as of September 17, the first phase of the employee stock ownership plan has purchased 12.81 million shares, at a cost of 134 million yuan, with an average price of 10.43 yuan per share. The purchase limit of the whole stock ownership plan is 300 million yuan. At present, there is still room for purchase of 140 million yuan, and it is expected to continue to increase its holdings in the later stage. In addition, the company launched an equity incentive program in 2016. high performance conditions are set: the growth rate of deducted non-net profit in 2016-2019 is not less than 85% (about 142 million), 190% (about 223 million), 308% (about 314 million) and 420% (about 400 million). At the same time, the weighted average return on assets is not less than 9%, 10%, 11% and 12%. High-standard incentive conditions are conducive to the unity of the company and promote the rapid development of performance.
The company is in an industry with high growth in the next 1-2 years: the company's business focuses on desalination and sponge cities.
By the end of the 15th, the scale of seawater desalination in China has reached 1.33 million tons / day, which is only 1.2% of the world scale of 85.24 million tons / day. At present, seawater desalination in China is used in industry, concentrated in coastal provinces with higher water prices, and it is expected that the 13th five-year Plan will usher in the critical point of outbreak. The first two pilot cities of Sponge City are progressing smoothly, and the third batch of cities will be launched soon. According to the Ministry of Housing and Construction, more than 20% of the urban built-up area will meet the target requirements by 2020, and by 2030, more than 80% of the urban built-up area will meet the target requirements, and the entire market size will exceed trillion yuan. With leading technology and project experience, the company is expected to fully enjoy the benefits of the outbreak of the industry and achieve rapid development.
Profit forecast: the company's 17-19 net profit is expected to be 2.39,3.42,464 million yuan, and the YOY+69.31%, 43.51% and 35.52 PE26X are 0.36,0.51 and 35.52 yuan respectively. The current stock price corresponds to the 17-19 dynamic PE26X, 18x and 13x, the company's business expansion is sustainable, and the certainty of future rapid growth is high, so "buy" suggestions are given.