I. Analysis and judgment
The new hope reorientates the intelligent urban and rural ecological environmental protection vanguard, and will be reborn in 2020.
In May 2019, New Hope hopes to become the controlling shareholder of the company. New Hope Group focuses on the development of modern agriculture, has a strong comprehensive strength, and has a sound layout of six sectors: food, agriculture, animal husbandry, dairy, culture and tourism, finance, environmental protection, and medical and health care. Is the industry leader in implementing the national rural revitalization strategy. At the work deployment meeting of Xingyuan Environment at the beginning of the year, Li Jianxiong, executive vice president, chief operating officer and chairman of Xingyuan, delivered a strategic speech entitled "2020, the year of Nirvana rebirth." As a leading environmental protection enterprise covering seven business systems of intelligent environmental protection equipment, water conservancy dredging, sewage treatment, ecological garden, intelligent water, dung treatment and soil remediation, and with a perfect layout of environmental protection industry chain, Xingyuan Environment is expected to give full play to the linkage benefits of the three elements of "environmental protection + industry + science and technology" in the future by relying on new hope industry cooperation internally and external cooperation with large state-owned enterprises. To create a smart urban and rural ecological and environmental protection vanguard.
The carding of the project in hand is progressing smoothly, ensuring the sources of funds for the project in various directions.
In May, the company issued a reply to the inquiry letter of the Shenzhen Stock Exchange's annual report, detailing the construction of more than 30 large-scale PPP/EPC projects at hand. For the past PPP orders signed during the Great Leap forward, the company combed in detail by reducing the amount of investment, terminating the project or changing the mode. In the future, the company will ensure the landing of existing projects by implementing project loans and issuing green bonds. At the same time, New Hope has also renewed 250 million shareholder loans in the near future. General Manager Zhou, the former chairman, also provided liquidity support to the company in the form of acquiring related claims.
The ecological cooperation of aquaculture is initially emerging, and there is a bright future after the business model is sorted out.
African classical swine fever and environmental protection ban have accelerated the continuous improvement of market concentration in the pig industry, and modern farming with high standards and high investment will become the trend of the times in the future. According to the New Hope Liuhe Annual report, it plans to invest 20 billion yuan in capital expenditure on the expansion of pig production capacity in 2020, while Xingyuan has announced 120 million orders for related civil construction and sewage treatment equipment this year. The subsidiary source environmental protection also received 500 million yuan of farm intelligent equipment integration orders. There are no strong domestic competitors in the field of aquaculture ecology, and the company is expected to gradually accumulate technology and experience through aquaculture ecological projects in Xiajin and other places, and gradually promote it to the whole industry after forming a demonstration effect.
II. Investment suggestions
The order situation of the company has continued to improve since the end of 2019, and we are optimistic about the strategic positioning of the company's smart urban and rural ecological and environmental protection vanguard, and believe that revenue will usher in an inflection point in 2020. after the completion of the project in hand and the improvement of the business model related to rural revitalization, the performance is more flexible. It is estimated that the company's EPS in 2020-2022 is 0.11,0.17 and 0.21 respectively, corresponding to the previous share price PE 29Universe 16x. Although the PE level is still higher than the industry average, the PB valuation of 2.1x is at the bottom since listing, with concern value and maintaining a "cautious recommendation" rating.
Third, risk tips
1, the carding of the projects on hand is not as expected; 2, the new business development such as livestock and poultry manure disposal is not as expected; 3, the financing environment of the environmental protection industry continues to deteriorate.
