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Changjiang Securities
Event description:
Yongqing Environmental Protection Announcements on signing major contracts were issued, with the main contents as follows:
On October 12, 2012, Yongqing Environmental Protection (Party B) and Shaanxi Weihe Power Generation Co., Ltd. (Party A) signed the "Shaanxi Weihe Power Generation Co., Ltd. # 3 and # 4 Unit Boiler Denitration and Supporting Reconstruction Project Contract", with the total contract price of 102.9 million yuan.
Event comment:
The main content of the company's contract: Shaanxi Weihe Power Generation Co., Ltd. # 3 and # 4 unit boiler denitration and supporting reconstruction project, of which # 3 unit boiler denitration (including 4 × 300MW unit reducing agent preparation utility system) and supporting reconstruction project were carried out from March 20 to June 20, 2013, and the maintenance period was about 90 days# The unit 4 was selected in 2014, and the total contract amount was 10290 yuan, which was settled according to the contract performance progress.
The total contract price is 102900000 yuan, accounting for 29.94% of the company's operating revenue in 2011. We will increase the net profit by 102900000 yuan, accounting for 29.03% of the net profit in 2011, based on a 10% net profit margin. If we calculate the current total share capital of 133560000 shares, we will increase the EPS by 0.08 yuan, which will significantly increase the company's performance, but the project will be completed in 2013-2014, It is expected that this contract will have no impact on the company's performance in 2012.
At present, the company's operating income mainly comes from project contracting, heavy metal soil remediation and custody operation projects. By the end of 2011, the installed capacity of thermal power in China was about 760 million kilowatts, and the capacity of denitration projects was only about 100 million kilowatt hours, accounting for only 10% of the total installed capacity of thermal power. The future denitration market has huge space. We estimate that the scale of denitration market will reach hundreds of billions by 2015. At present, thermal power denitration has started. In 2012, the company has won many denitration orders in the field of denitration, such as Jingyuan No.2 Power Generation Co., Ltd., Xinjiang Zhongtai Mining and Metallurgy Co., Ltd., Xinjiang Huatai Heavy Chemical Co., Ltd. The company has good technical advantages and rich project experience in the field of denitration engineering, and is expected to get more orders in the field of denitration in the future. At the same time, in the field of environmental remediation, the company set up a new pharmaceutical company in 2012 to extend the industrial chain, signed environmental cooperation agreements with Xinyu City, Xinyu Iron and Steel, Yongxing County, and Tianyuan District, Zhuzhou, and began to obtain orders for heavy metal soil remediation projects. With the opening of the Xiangjiang River basin heavy metal market, the company has great potential to obtain contracts and orders in the future.
We expect the company's EPS from 2012 to 2014 to be 0.52 yuan, 0.82 yuan and 1.02 yuan respectively. Corresponding to the current PE52, 33 and 26 times, due to the company's great potential in the field of denitration and environmental remediation, the rating of "recommended" is given, but the valuation is high in the short term, so pay attention to the valuation risk.
