Wiley (300190): Deep ploughing landfill leachate treatment optimizes asset structure
Target price is 6.63 yuan, maintaining "buy" rating
On December 14, Welley announced that the company had won the bid for Changchun and Shenyang Daxin landfill leachate treatment projects. The company operated around organic waste recycling and industrial energy conservation, and accumulated rich project experience, technical advantages and customer resources in related fields. Maintaining the profit forecast, we expect the company's EPS from 2023 to 2025 to be 0.07, 0.17 and 0.30 yuan respectively. The 24 year Wind of comparable companies unanimously expected the average PE to be 26.0 times. Considering the company's leading technology and outstanding operational capability, the acquisition and execution of engineering orders are expected to speed up, and the performance flexibility is high, the company will be given 39.0 times PE for 24 years, with a target price of 6.63 yuan (the previous value is 5.10 yuan), and maintain the "buy" rating.
Deep ploughing of landfill leachate treatment, and successive large orders
The total amount of the leachate treatment project of Changchun Municipal Solid Waste Treatment Center is estimated to be 171 million yuan. Welley will provide a set of leachate treatment facilities with a treatment capacity of not less than 1000 tons/day (with a peak treatment capacity of 1500 tons/day), and be responsible for the installation, commissioning, operation and removal of facilities after the service is completed. The contract period is three years, one contract is signed every year, and the bid winning price is 155.98 yuan/ton. The total amount of the franchise project of increasing temporary treatment facilities for leachate in Shenyang Daxin Garbage Dump is estimated to be 292 million yuan. Welley is responsible for the construction of 1400 tons/day temporary treatment facilities for leachate. The contract performance period is 4.5 years of the franchise period, and the winning unit price is 126.98 yuan/ton. The company has been deeply engaged in the treatment of landfill leachate for nearly 20 years, and has compiled a number of industry specifications, with core competitive advantages.
Optimize asset structure and improve cash flow
According to the announcement of Villy and Xingrong Environment on November 18, Villy plans to transfer 100% of the equity of Xi'an Villy to Xingrong Environment at a price of 283 million yuan. Xi'an Villy is a food waste franchise project. The construction scale of Phase I is 200 tons/day for food waste and 20 tons/day for waste grease. The franchise period is 30 years (2016-2046); The construction scale of Phase II is 200 tons/day of food waste, and the franchise period is 26 years (2020-2046). Xi'an Weili's operation is stable. From January to October 2023, it will achieve a revenue/net profit of 5675-995 million yuan. As of October 31, its net assets will be 178 million yuan, and the corresponding equity transfer PB will be 1.6 times. As of September 30, the monetary capital of Welley was 546 million yuan. We believe that this equity transfer is expected to optimize the asset structure and improve the company's cash flow.
Risk tip: the implementation progress of the project is not as expected, and the release of orders from the leachate and food waste disposal market is not as expected.
