Xingrong Environment (000598) Annual Report Comments: Steady Progress and Low Expectation Forecast Repair
Event: The company released its 18-year annual report: total operating revenue 41.
60 ppm, an increase of 11 years.
48%; Net profit attributable to shareholders of listed companies.
88 ppm, a 10-year increase of 10.
30%; basically realized profit.
33 yuan; expected average return on net assets is 9.
84%, an increase of 0 a year.
Opinion: Steady operation and performance growth in line with expectations.
The company’s various business segments grew steadily in 18 years, of which the water supply business realized operating income24.
21 ppm, an increase of 10 in ten years.
65%, revenue accounted for 58.
20%; Sewage treatment service and pipe network engineering business realized operating income11.
82 ppm, an increase of ten years8.
29%, revenue accounted for 28.
43%; operating income of environmental protection sector4.
35 ppm, an increase of 11 years.
63%, revenue accounted for 10.
The balanced development of all business segments, the increase in the scale of revenues are the increase in the supply of tap water, the increase in sewage treatment capacity and the increase in waste incineration power generation.
The water supply and wastewater treatment business developed steadily.
Tap water supply and wastewater treatment are the company’s core businesses.
From the perspective of volume: the company’s tap water supply sales volume for 18 years8.
1.9 billion tons, an increase of 6 in ten years.
42%; sales of sewage treatment 9.
5.4 billion tons, an increase of 5 in ten years.
It is worth mentioning that starting from June 17th, the third-stage sewage treatment price of the company’s main urban area was zero.
The price increase of 1 yuan / cubic meter has a positive impact on the sewage treatment income in this period.
In 18 years, the company completed the acquisition of the BOT project of the Chengdu Waterworks No.6 Plant B plant, and completed the second phase of the Chengdu Waterworks No.7 Plant project and the Chengdu High-tech Zone Zhonghe Sewage Treatment Plant project.
Finally, by the end of 18, the company was operating, and the scale of water supply and wastewater treatment projects under construction and planned exceeded 700 tons / day, with an annual increase of nearly 100 tons / day.
The company actively integrates water 厦门夜网 supply and drainage resources in downtown Chengdu, and gradually expands to surrounding Chengdu and other cities in the province, forming the basis for the expansion of water treatment scale.
Longfeng Power Plant entered the commissioning period, and the waste incineration power generation business grew strongly.
The company’s environmental protection business includes waste incineration power generation, sewage sludge treatment and waste leakage disposal.
18 years of company waste incineration power generation3.
1.5 billion kWh, an increase of 66 in ten years.
7%; sludge treatment capacity 14.
88 for the first time, growing by 2 each year.01%; garbage leakage disposal volume 68 inserts, every 19.
At present, the company operates, and the design and processing capacity of domestic waste incineration power generation under construction and planned to be built is 9,300 tons / day (1500 tons / day).Power plant, the company currently has an actual waste incineration operating capacity of 3900 tons / day).
It is expected that the second-phase project of Wanxing Environmental Protection Power Plant will be gradually realized, the operation of Dalin Environmental Protection Power Plant and the capacity of projects in operation will be maximized, and the income from waste incineration power generation is expected to continue to grow.
The advantages of financing costs continued to play.
During the 18 years, the company’s overall period cost control was basically reasonable, and the three costs totaled4.
81 yuan, an annual increase of 9.
97%, with an expense ratio of 11.
74%, basically the same every year.
Among them, selling expenses 1.
10 ppm, a ten-year increase4.
56%, sales expense ratio 2.
64%, down one year.
17 units; administrative expenses 2.
850,000 yuan, an increase of 13 in ten years.
05%, management expense ratio 7.
04%, a year increase of 0.
02 units; financial expenses 8556.
420,000 yuan, an annual increase of 21.
89%, financial expense ratio 2.
06%, a year to promote 0.
The rapid growth of the company’s financial expenses is related to the cessation of capitalization of the company’s projects under construction.
The company’s debt structure is dominated by long-term borrowings.
In November 18, the company issued 5 trillion 5-year medium-term notes with a coupon rate of 4.
The company’s waste incineration power generation project and water project are asset-heavy projects and require a large amount of capital investment.
The company’s rich financing channels and low financing costs are conducive to improving the ROE level of the project.
Rich cash flow from operating activities and strong hematopoiesis.
Net cash flow from operating activities of the company for 18 years.
11 ppm, an increase of 15 in ten years.
The company has good cash flow from operating activities, which is related to the nature of the company’s water supply business and sewage treatment service business.
The abundant cash flow from operating activities is conducive to the company’s financial stability and the implementation of waste incineration power generation projects and water projects.
The share repurchase is intended to be used to implement employee incentives, which is conducive to employees’ work enthusiasm.
In January 19, the company issued an announcement to plan to repurchase shares to implement employee stock ownership plans or equity incentives.
The number of repurchases this time is not less than 50 million shares and not more than 100 million shares, and the repurchase price is not more than 4.
5 yuan / share.
Merger, the company actively implements share repurchase integration to recognize the value of investment in the secondary market; reorganization, the company’s repurchase pace as a conventional public utility company is conducive to stimulating corporate vitality, and the shares without incentives will be repurchased 36Month by month, this can increase revenue.
The company held monetary funds22 at the end of 18 years.
8.9 billion US dollars, its funds are too abundant, and even the full implementation of repurchases has little financial impact on the company.
Maintain the company’s “overweight” investment rating.
As a leading water company in Chengdu, the company deeply cultivates the local water market and expands to other regions in the province. The implementation of waste incineration power generation projects has led to stable growth in performance.
It is expected that the company’s fully diluted EPS in 19 and 20 will be 0.
41 yuan, according to the closing price of 4 on March 8, 19.
62 yuan budget calculation, PE is 12.
5 times, 11.
The company estimates the upper limit of the level, and maintains stable profit expectations, maintaining the company’s “overweight” investment rating.
Risk reminder: The waste incineration power generation project has an “adjacent” effect, and the project landing may be less than expected.