Weiming Environmental Protection (603568): Steady business expansion and positive optimism for long-term steady growth

Event: Weiming Environmental announced the 2019 half-year report, and the company achieved operating income in the first half of 20199.

670,000 yuan, an increase of 30 in ten years.

76%; net profit attributable to mothers4.

9 billion, an increase of 30 in ten years.

63%; net profit after deduction to mother 4.

77 ppm, an increase of 29 in ten years.

88%.

Comments: 1.

Income statement analysis: The operation is stable, and the performance in the first half of 2019 is in line with expectations; the gross profit margin has increased steadily, and the expense ratio has increased slightly. The production and operation are stable, and the first half of 19 results are in line with expectations. The company will achieve operating income in the first half of 20199.

670,000 yuan, an increase of 30 in ten years.

76%; net profit attributable to mothers4.

9 billion, an increase of 30 in ten years.

63%; net profit after deduction to mother 4.

77 ppm, an increase of 29 in ten years.

88%, the company’s first half performance was in line with expectations.

The reason for the rapid growth of the company’s average income and profit in the first half of the year was mainly due to the smooth implementation of the company’s business plan. The Wuyi project, the second phase of the Ruian project, the Jieshou project, the Wannian project, and the Yucang project officially started operation, bringing waste disposal.With the steady increase of power generation and the steady progress of the company’s projects under construction, the rapid growth of equipment and technical service income has been achieved. The transformation, transformation of kitchen waste treatment, garbage collection and transportation, and leakage disposal have also achieved good results and are effective.Promote the increase of income and profit.

In the first half of the year, the company’s operations were stable, and the total amount of domestic garbage storage in all operating projects was 241.

57 for the first time, growing 21 per year.

9%, complete the online power 7.

2 billion degrees, an increase of 19 in ten years.

8%.

In the first half of the year, the company completed the removal and removal of kitchen waste8.

30 Initially, handle kitchen waste and sludge 9.

51 is the earliest and has completed the removal and removal of domestic waste 20.

At the top of the 73, the leak management capillary treatment station entrusted to manage the leakage diameter 5 in total.

06.

The gross profit margin increased steadily and maintained a high level; the expense ratio rose slightly, and the financial expense ratio rose. The company’s comprehensive gross profit margin was 62 in the first half of the year.

9%, compared with 62 in the same period last year.

0% rose slightly and continued to maintain a high level, reflecting the company’s professional management capabilities and core competitiveness.

The sum of the three expense ratios for the first half of the year was 10.

98%, 9 over the same period last year.

A slight increase of 25% was mainly related to the increase in the financial expense ratio, which was 0 in the first half of the year.

430,000 yuan, an increase of 86 in ten years.

2%, financial expenses4.

41%, an increase of 1 per year.

3pct, mainly due to the recognition of interest expenses on convertible bonds. The company’s subsequent conversion of convertible bonds is expected to have an impact on the internal financial expense ratio; the company’s sales expenses and management expenses remained basically stable in the first half of the year.

2.

The construction of projects under construction and new projects are progressing smoothly, the trend of replenishment orders is good, and the horizontal + preliminary whole industry chain is actively developing with significant 南京桑拿网 results. The operation + equipment income is expected to continue to grow rapidly. The construction of projects and new projects is progressing smoothly, and waste incineration is getting orders.In the first half of the year, the company’s projects under construction and preparations progressed smoothly. The Wuyi project, the second phase of the Ruian project, the Jieshou project, and the Wannian project officially started operation. The Yucang project completed technical transformation and was officially put into operation.The Ruian restaurant and kitchen project was officially put into operation. The second phase of the Jiashan project was officially put into operation in June; transformation, Fengxin project, Wuyuan project, Dongyang project, Shuangyashan project and Longquan project have obtained project approval and environmental impact assessment approval.Project, Yongfeng Project and Minqing Project completed project approval.The construction of the Zhangshu project, the second phase of the Linhai project, and the second phase of the Yuhuan project are progressing normally. The construction of Yuhuan, Yongkang, Jiashan, Jiangshan and other restaurant and kitchen projects is progressing smoothly.

The Wuyi Food and Kitchen Project obtained feasibility study approval.

The company’s domestic waste incineration treatment project continued to make breakthroughs. In the first half of the year, the company completed the Lotus project (500 tons / day), the Yongfeng project (1200 tons / day), the Minqing project (600 tons / day), and the Luohe project (500 tons / day).(Day) Day) Signed a contract and signed a supplementary agreement for the Dongyang project (total scale of 2200 tons / day, adding 1500 tons / day on the basis), the total amount of domestic waste disposal for the above projects is 4,300 tons / day; gradually, the company recently added AnfuCounty incineration projects (500 tons / day), Jiahe project (1200 tons / day), and other waste incineration treatment projects have totaled 6,000 tons / day in new domestic waste incineration treatment projects since this year.

In the end, the total scale of the company’s domestic waste incineration power generation project is close to 3 per day, of which about 1 has been put into operation.

46 earliest / day, the total scale of projects under construction and preparation is about 1.

41 days / day.

Continue to advance the initial + horizontal development strategy in the solid waste field with significant results. In addition to actively expanding in the field of domestic waste incineration, the company reported that it has actively implemented the initial + horizontal expansion business strategy in the solid waste field and achieved good results.

In essence, it takes advantage of the integration of the entire industrial chain in the field of solid waste, increases the output of solid waste treatment equipment, technology and services, and carries out upstream cleaning and transportation of smart waste and smart sanitation. Among them, in the areas of waste removal and smart sanitation, the companyAnd subsidiary companies and subsidiaries across multiple domestic garbage transportation agreements, including Jiashan County domestic garbage transportation agreement, Wenzhou Ouhai Economic Development Zone, Ouqiao District Panqiao Street and Lijing Street, and other domestic waste transportation agreements, intervening moreRemoval of domestic waste in the area.

In addition, the company recently successfully won the bid for the urban and rural domestic waste collection and transportation system project in Jiahe County, Hunan Province, and the municipal domestic waste transportation operation marketization project in Lucheng District, Wenzhou.And won the bid for the second domestic garbage compression transfer station PPP project in Pengzhou; in the field of equipment and technical services, the company’s projects under construction and new construction projects were smoothly advanced, effectively promoting the sales of solid waste treatment equipment, and the company adjusted Weiming equipment production managementModel, strengthened procurement management, and set up a product sales department to speed up external sales of equipment.

In terms of breakthroughs, the company actively expanded the business of kitchen waste treatment, leakage treatment, landfill and other businesses, and continued to make breakthroughs.

Among them, in the field of kitchen and kitchen treatment, the company added Jiangshan, Wuyi, Yueqing and Yongjia kitchen and kitchen waste collection and transportation projects in the first half of the year, signed the Jiashan kitchen and kitchen waste treatment agreement, and added the scale of kitchen and kitchen waste treatment projects.About 375 tons / day; in May, the company signed the “Luohe City Biomass Cogeneration Project Investment Invitation Contract”, which will build a 300-ton biomass-processing project per day, which is the first biomass-processing project obtained by the company.

3.

The overall situation of cash flow is good, the debt rate is low, the company has improved its ability to resist risks and expand the space. In the first half of 19, the company sold goods and provided labor services to receive cash.

26 ppm, an increase of 20 in ten years.

3%, the ratio of cash received from sales of goods and labor services to operating income was 75.

0%, compared with 81 in the same period last year.

The improvement of 5% is initially due to the rapid growth of the company’s equipment sales and technical service business income in the first half of 2019, and the accounts receivable from the same period of the previous year.

6 trillion increased significantly to 5.

2 trillion; the company’s net cash flow from operating activities was 2.

65 ppm, a 63-year increase of 63.

1%, mainly due to the increase in cash received from sales of goods, provision of labor services and other cash related to operating activities, including other cash related to operating activities

53 trillion, 0 compared with the same period last year.

One hundred millionth of an inch.

In the first half of 2019, the company purchased and built fixed assets, and the cash paid for intangible assets and other long-term assets was 4.

US $ 4.1 billion, basically unchanged from the same period of the previous year, and the net cash flow from investment activities was -4.

300 million, -2 from the previous issue.

6 trillion reduced by 62.

9%, mainly due to the decrease in redemption of wealth management products.

The company’s net cash flow from financing activities in the first half of 2019 was -4.

5.6 billion, 0 compared with the same period last year.

$ 1.8 billion was apparent, mainly due to the increase in cash paid for debt repayments.

The company’s currency in hand in the first half of 2019 was 5.

680,000 yuan, a decrease of 52 from the end of 18 years.

1%, mainly due to the increase in cash paid by the company for repayment of loans.

As of June 30, the company no longer short-term loans, long-term loans from 5 at the end of 18 years.

6.7 billion fell to 4.

01 billion, the company’s assets and debt reorganization41.

75%, 46 earlier than the end of 18 years.

The 23% drop was obvious, which improved the company’s anti-risk ability and future expansion space.

4. Profit forecast and investment advice The company has good production and operation, and the project has excellent operating results. The project has been continuously increasing since 19 years, and has continued to maintain a good momentum, and has achieved significant results in market expansion in Jiangxi and other places.The proportion of the project is basically maintained at a good ratio of 1: 1. Under the company’s good cash refund and low interest rate blessing, the projects under construction and preparation are designed to advance steadily, bringing together growth in operating and equipment revenue.

According to the “Thirteenth Five-Year Plan” National Urban Harmless Waste Treatment Facilities Construction Plan, by 2020, the scale of waste incineration treatment facilities will reach 59.

1 At least, according to the “China Urban and Rural Construction Statistical Yearbook” by the Ministry of Housing and Urban-Rural Development, at the end of 17 years, the total processing capacity of some domestic waste incineration power plants built and put into operation at or above the county level was 33.

On the 14th / day, the gap will still break. As a leading company in the industry, the company actively expands and strives to continue to maintain a better attitude to take orders.

In addition to the continuous deep cultivation and development of the waste incineration field, the company has actively expanded in the horizontal and preliminary directions in the solid waste field and achieved good results.

Overall, the company has a high level of operation and management, ample projects under construction, overlapping dividends from high industry growth rates, and actively expanding, which is expected to achieve long-term steady growth.

It is estimated that the net profit attributable to the mother for the year 19-21 will be 9.

4, 11.

8, 14.

4 ppm, the corresponding PE at current market value is estimated to be about 19.

2, 15.

2, 12.

5 times, maintain prudent recommendation rating.

5,

Risk reminders: The project progress is not up to expectations, the waste disposal volume is not up to expectations, industry policy risks, and market-wide system risks.