It has been deeply involved in the environmental protection industry for 20 years and has grown into a leader in water environment treatment and solid waste treatment. Tianyuan Environmental Protection was founded in 2009, officially listed on the New Third Board in 2014, successfully listed on the Shenzhen Stock Exchange GEM in 2021, and selected as a national specialized and new “little giant” enterprise in 2022. At the beginning of its establishment, the company focused on garbage leachate treatment, then gradually extended to difficult sewage and wastewater treatment industries such as kitchen biogas liquid, sanitation facility cleaning wastewater, difficult industrial sewage, and recycling sewage from power plants.
The main environmental protection industry has sufficient orders in hand, and its performance has achieved rapid growth. In 2023, the company achieved a significant increase in orders, with annual contracts of 4.457 billion yuan, achieving sales revenue of 1,947 billion yuan, opening up a new situation in the company's development. In terms of water treatment business, the company gave full play to the many advantages of technology, brands, services, etc. accumulated in the field of water environment treatment, and promoted the continuous and rapid growth of the water environment treatment business. Throughout the year, 33 new water environment treatment projects were added, and contracts worth more than 2.4 billion yuan were signed. In terms of the environmental energy business, the environmental energy sector has added 6 new waste incineration power generation projects, with a cumulative total of 4,500 tons of garbage disposal per day. After the project is put into operation, it will effectively increase the company's subsequent fixed income. In terms of solid waste disposal business, the company has re-optimized the solid waste disposal business, clearly laying out the business layout around sludge treatment, integrated urban and rural sanitation, fly ash disposal, etc., and has successively undertook projects such as Shizong's integrated urban and rural domestic waste transfer and service projects, and centralized sludge treatment in Chishui City. The total contract amount was 150 million yuan, providing a new profit growth point for the company in the future. In terms of environmental protection equipment, the company is committed to producing industry-leading high-end environmental protection equipment products. The equipment manufacturing business achieved a revenue increase of 2100.51% compared to 2022. At the same time, 56.453 million yuan was invested throughout 2023 to transform and upgrade the equipment manufacturing production line to achieve intelligent and automated manufacturing, and ensure that the annual production capacity of the equipment manufacturing business reached 1 billion yuan.
Lay out the new energy sector to create a second growth pole. At present, the company has begun to gradually lay out the new energy sector. While the main water treatment business is growing steadily, it is actively building the second growth pole for new energy sources. (1) The company announced the establishment of Wuhan Tianyuan Energy Co., Ltd. to expand the photovoltaic and wind power business, while also developing charging piles and energy storage businesses to expand the field of hydrogen energy. (2) The company is actively developing technologies related to hydrogen production with Huazhong University of Science and Technology and other authorities. It plans to use low-cost power generation such as photovoltaics and wind power to solve the electricity problems of hydrogen production, and also use hydrogen energy to produce methanol and ethanol products. In the future, hydrogen production from Fengguang will become one of the company's strong performance growth points. (3) The company operates more than ten sewage plants, and will effectively reduce the company's sewage operating costs through the development of the photovoltaic+sewage plant model. (4) Deepen cooperation with Huawei's liquid-cooled fast charging technology and develop the business layout of charging stations nationwide.
Profit forecast and valuation: The company's revenue for 24/25 is estimated to be 26.50/3.412 billion yuan, up 36.09%/28.78% year on year; net profit to mother is 3.71/505 billion yuan, up 31.05%/36.33% year on year, respectively; EPS is 0.88/1.20 yuan, corresponding to PE 12/8 times. Referring to the 24-year PE average of comparable companies, the average PE value of the company is about 17.5 times. There is still room for repair in the company's valuation, so it is given a “buy” rating.
Risk warning: risks caused by project progress falling short of expectations, new orders falling short of expectations, etc.; risks caused by downstream repayments falling short of expectations, a sharp increase in accounts receivable, increased financial risk, etc.; risks caused by the layout of the new energy business falling short of expectations, etc.