Fuchun Environmental Protection (002479) Company In-depth Research Report: Pioneer of solid waste + thermal power model regional integration + capacity release promotes profit recovery

Fuchun Environmental Protection (002479) Company In-depth Research Report: Pioneer of “solid waste + thermal power” model regional integration + capacity release promotes profit recovery

Core point of view: Leading the way to create a “thermoelectric + solid waste” model, heat demand is the core driving factor for profit growth. The company strives to create a “solid waste treatment + combined heat and power” recycling industry model. While disposing of solid waste such as garbage and sludge,Provide clean 武汉夜生活网 heat and power for industrial parks.

The company’s operating income in 2018 was 30.

100 million yuan (-9.

4%), net profit attributable to mother 1.

2.5 billion (-63.

6%), the decrease in performance was mainly due to the provision of long-term equity investments and the total impairment loss of goodwill assets.

170,000 yuan and environmental inspections have led to a decline in downstream demand, and the company’s main business has a gross profit contribution rate of 88% for the thermal power + solid waste business.

The business model guarantees the company’s good cash flow, and the driving force for future performance growth mainly comes from the increase in demand for thermal power and outbound project mergers and acquisitions.

  Regional heat demand integration + gradual release of capacity, future growth is worth looking forward to M & A integration of Zhejiang Yinzhou (Donggang Thermal Power), Jiangsu Changzhou (Xingang Thermal Power), Jiangsu Liyang, Qingyuan Ecology (located in the headquarters park), 5 projects usually located in the south, 2018At the end of the year, the installed power generation capacity was 292.

5 MW, heating capacity of 2820 steam tons / hour, daily treatment of 1,000 tons of garbage, daily treatment of 7,000 tons of sludge.

Looking forward to the next two years, the headquarters park will be accompanied by the expected shutdown, the company ‘s heating area will increase through growth elasticity, and regional heating integration is expected to be potential. In terms of the promotion of offsite projects, the company has a total of 75MW of power generation under construction and a heating capacity of 620 steam tons per hour., Will be gradually put into production.

  Deeply involved in the solid waste industrial chain, the multi-field layout will enter the harvesting period. The company will lay out the solid waste full industrial chain. Recently, it has jointly won the bid for the Fuyang waste incineration project with Everbright. After the construction is completed, the company’s waste treatment capacity will rise to 2500t / d.

In addition, the dioxin real-time online monitoring system developed by the company and Zhejiang University has reached the international leading level, and the space for future promotion will break through.

At the same time, the company signed a strategic cooperation agreement with Yuanfeng Energy. Using the advantages of oxygen-rich combustion and new gasification can improve the efficiency of the company’s heating business and replace the supply of liquid nitrogen, liquid oxygen, CO, CH4, etc.Chemical products, two-way increase the economic benefits of thermal power projects.

  Regional integration + capacity release has driven profit recovery, and a “buy” rating is expected to give the company EPS of 0-2019-2021.

37, 0.

46 and 0.

56 yuan / share, corresponding to PE at the latest closing price of 16.

2, 12.

8, 10.

7 times.

From 2020 to 2021, the company’s non-deduction performance will still maintain a growth rate of more than 20%, giving a PE estimate of 20 times in 2019, corresponding to 7.

34 yuan / share reasonable value.

The company has ample cash on hand, maximizing the integration of regional production capacity, and in-depth layout of solid waste fields such as waste incineration. The repurchase plan of US $ 400-400 million is still advancing to show consensus and give a “buy” rating.

  Risk reminder: changes in heat demand lead to increased profit margins; the project expansion progress gradually exceeds expectations; environmental protection standards lead to higher operating costs, and asset impairment is uncertain.