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Longjing Environmental Protection (600388): Non-electricity business has gradually become the main business

Longjing Environmental Protection (600388): Non-electricity business has gradually become the main business
Event: On August 7, 2019, Longjing Environmental announced the 2019 semi-annual report, which was consolidated and the company achieved revenue of 44.380,000 yuan, an increase of 36 in ten years.87%; net profit attributable to mother is 2.77 ppm, an increase of 10 in ten years.49%; realized basic profit income of 0.26 yuan. Opinion: Non-electricity business is 重庆耍耍网 expected to become a driving force for the company’s performance.With the continuous release of non-electricity smoke control market, the company’s business focus has gradually shifted to non-electricity.In the first half of 2019, the company added 73 effective contracts.1 ‰, an increase of 9 in ten years.1%, of which power industry 23.770,000 yuan, 49 for non-electrical industries.33 trillion; 194 trillion orders in hand at the end of the period, an increase of 12 each year.79%, of which 90 are orders from the power industry.8.9 billion, 103 non-electric orders.1.1 billion. The business layout continued to be enriched and gradually transformed into a comprehensive environmental protection enterprise.In the focus of the report, the company continued to march into the whole field of ecological and environmental protection, and obtained Grade B qualification for special design of water pollution treatment, Grade B qualification for solid waste treatment and disposal engineering design, Grade B qualification for pollution remediation engineering design, for the company to enter the water pollution treatment, solidWaste potential, pollution remediation and other business potential foundation.The company acquired Dechang Environmental 99 in cash.28% of shares have officially entered the waste incineration power generation asset operation field.The company actively develops new businesses such as industrial wastewater treatment, VOC treatment, ecological restoration, waste incineration power generation, and smart environmental protection. It will further enrich its business layout and expand its business scale, which will help to discover new business growth poles. Gross profit margin has increased, and operating cash flow continues to be under pressure.In the first half of 2019, the company’s overall performance was good, and the average revenue and net profit increased, but the overall gross profit margin was 21.56%, compared with the same period last year 3.87 units.In addition, the company’s net cash flow from operating activities was -6.61 trillion, -2 in the same period last year.76 ppm, the shrinkage of the cracks, was mainly due to the increase in performance bonds and purchases of goods and cash paid for labor services in the current period. Earnings forecast and rating: Based on the company’s existing share capital, we expect the company’s total diluted earnings for 2019-2021 to be 0 respectively.83 yuan, 0.95 yuan, 1.04 yuan, based on the closing price of 2019-08-30, the corresponding PE is 13 times, 11 times and 10 times respectively.Considering that the overall demand of the thermal power market for atmospheric governance has declined, the marketization process of the non-electricity industry has been slow, and the “Hold” rating is maintained. Risk factors: intensified competition in the industry; difficulty in customer repayment; non-electricity orders advance less than expected.