Han Lan Environment (600323) Annual Report Comments: Steady performance growth, strong potential in the big solid waste field

Han Lan Environment (600323) Annual Report Comments: Steady performance growth, strong potential in the “big solid waste” field

Deducting non-net profit increases by 21 every year.

51%, 深圳桑拿网 the performance was slightly higher than expected. The company released its 2018 annual report, and the company achieved revenue of 48.

48 ppm (ten years +15.

38%); net profit attributable to mother 8.

76 trillion (decade +34.

23%); deduct non-net profit 7.

2.2 billion (twice + 21.

51%).

The main reasons for the company’s increase in net profit attributable to its mother: (1) Disposal of 100% of the company’s distribution income in the government kiln market (earnings before tax is about 1.

600 million); (2) Complete the acquisition of 30% equity in Gas Development.

We believe that the company’s water and gas assets provide strong support for cash flow, and the unique “Hanlan model” accelerates replication in different places, explores the hazardous waste blue ocean market, and has strong performance certainty. We make profit forecasts based on the company ‘s latest progressAdjusted, it is expected that the company’s EPS for 2019-2021 will be 1.

17 (-0.

03), 1.

43 (+0.

02) and 1.

57 yuan, the current sustainable corresponding PE is 14 respectively.

6, 11.

9 and 10.

9 times, maintaining the “recommended” level.

The “big solid waste” field is full of strength, and “gas + water” is working together (1) solid waste: revenue of 17.

6.5 billion (+24.

24%), the main reason for the increase is the Dalian project commissioning and some project price adjustments, followed by Harbin, Mudanjiang and other kitchen and kitchen projects, Lechang, Huaiji, Suixi agricultural solid waste projects, Nanhai hazardous waste projects and other projects under construction will continue in 2019, Jiangxi Ganzhou Hazardous Waste Project (7.

2Announcement / year) Put into trial operation in January 2019 with high growth certainty.

(2) Gas: Revenue 17.

10,000 yuan (ten years +20.

33%), the main reason for the increase is that the ceramic industry has achieved remarkable results in coal-to-gas conversion, and industrial users have expanded smoothly.

(3) Water supply: revenue 9.

0.2 million yuan (ten years +0.

42%), the main reason for the increase is the increase in water sales.

(4) Drainage: Revenue 2.

3 billion (+22.

01%). The increase was mainly due to the increase in operating income of the sewage network and the commissioning of some new projects.

Expenses are well controlled and the gross profit margin is basically stable. The company’s expense ratio (including R & D) during the period was 12.

63% (decade -0.

27pct), where the sales / management / financial expense ratios are 1.

43% / 6.

80% / 4.

41%, a ten-year change of -0.23pct / -0.

19pct / + 0.

15pct, good overall control.

The company’s overall gross profit margin was 29.

95% (year -1.

68pct), which remained stable, with a solid waste business gross margin of 35.

20% (year -4.

85pct), mainly due to environmental protection, increased safety requirements, the expansion of material replenishment and technical upgrading of equipment and the rise in material prices; the gross profit margin of the transportation business 31.

07% (+2 per night.

22 pct), mainly due to the decline in costs such as depreciation and water loss rate; gross profit margin of drainage business 40.

40% (previously +3.

31pct), the main reason is that the software and hardware facilities for sewage pipe network operation have not been fully in place.

Risk reminder: The “Hanlan Model” has been promoted less than expected, and the financing environment has deteriorated.