This report is read as follows:
The company is the only environmental protection listing platform under Guodian Investment Co., Ltd., and now its main business is electric smoke control engineering services and franchising. At present, it is committed to the transformation to non-electric flue gas treatment, water treatment and solid waste disposal.
Main points of investment:
Investment suggestion: it is predicted that the EPS from 2019 to 2021 is 0.18,0.20 and 0.23 yuan respectively.
With reference to the average valuation level of the industry and taking into account the diversified layout of the company, such as water, nuclear waste disposal and solid waste disposal, there is more flexibility for performance improvement. It will be given 40 times dynamic PE in 2019 with a target price of 7.20 yuan. Cover for the first time, give cautious overweight rating.
twelve。 Guodian Investment's environmental protection business integration platform: the company is an important environmental protection business integration platform under Guodian Investment. Thanks to the market opportunities brought about by the continuous raising of standards for flue gas treatment, the company focuses on the engineering services and operation services of flue gas treatment in thermal power plants. In 2018, the company's engineering service income was 1.428 billion yuan, accounting for 39%, and franchising income was 1.822 billion yuan, accounting for 50%. By the end of 2017, the market share of desulphurization and denitrification franchise scale ranked third and second, respectively.
13. Committed to building a comprehensive environmental protection business platform: with the thermal power flue gas emission standards raised to the most stringent level in the world, the company has expanded its business layout to non-electric flue gas treatment, water treatment, solid waste disposal and other fields. In 2018, the company's non-electric smoke treatment orders increased by 84% compared with the same period last year, surpassing the electric smoke treatment plate for the first time. The township water plate is progressing smoothly, the management effect of the bid-winning project has been recognized by the competent department, and important progress has been made in nuclear waste environmental protection, solid waste and other business. it is one of the only three domestic enterprises with medium and low-level nuclear waste treatment licenses.
14. Backed by SPIC Group, flexible transformation to tap growth potential: backed by SPIC Group's huge power production capacity, the company holds a large number of flue gas management operating assets, which is the basis of stable performance and cash return in the future. and is expected to continue to tap the new needs of environmental protection in power plants. At the same time, the active layout of new environmental protection business is expected to cultivate new performance breakthroughs in the areas of hazardous waste disposal such as water treatment, nuclear waste disposal and catalyst regeneration in the future.
15. Risk hint: with the completion of the centralized transformation of the flue gas treatment market in power and non-electric pollution industries, the performance growth of the company's engineering service sector will be under certain pressure.