Longjing Environmental Protection (600388): The rapid transition to non-electricity sector results in line with expectations

Longjing Environmental Protection (600388): The rapid transition to non-electricity sector results in line with expectations
Key Investment Events: The company achieved revenue of 94 in 18 years.02 ppm, an increase of 15 in ten years.9%, mainly due to dust collectors, supporting equipment and installation business revenue grew rapidly; net profit attributable to mother 8.10,000 yuan, an increase of 10 in ten years.62%; net profit of non-attributed mothers7.30,000 yuan, an increase of 6 in ten years.83%; expected average ROE is 16.66%, a reduction of 0 per year.26 points, in addition to the announcement of a cash dividend of 1 for every 10 shares.7 yuan.  Non-electricity governance performance increased, and new businesses made breakthroughs.In 2018, the market for coal-fired atmospheric governance was difficult, and the market for non-electricity atmospheric governance continued to improve. The company actively promoted the shift of its strategic focus to the non-electricity industry. The non-electricity flue gas management business was replaced by other companies. Other emerging businesses made breakthroughs, and net revenues grew steadily, Reported that Pioneer has achieved operating income of 94.02 ppm, an increase of 15 in ten years.9%, net profit attributable to mother 8.10,000 yuan, an increase of 10 in ten years.62%.The main business contract also increased significantly. In 2018, the company’s new orders were 13 billion US dollars, an increase of 9.4 billion from the same period last year.3830%, the order structure has also been transformed to the non-electricity sector, of which the order of non-electricity industry increased by 8.3 billion, accounting for 63 of the total new orders.85%, the power industry orders 470,000 yuan.At the same time, the company actively expanded its emerging business in the non-gas and environmental protection sector, signing new VOCS contracts in new orders of US $ 13 billion1.370,000 yuan, soil repair contract 0.1.7 billion, pipe belt transportation contract3.40,000 yuan, industrial wastewater treatment contract1.8.1 billion.As of the end of 2018, the company had 172 trillion orders on hand, which was 1 of 94 trillion in previous revenue1.83 times.  Gross profit margin was basically flat, and financial expenses increased.The company’s gross profit margin in 2018 was 24.08%, a slight decrease of 0 a year.61 units.Period expenses (plus R & D expenses) increased for ten years.02% to 12.27 trillion, during which the rate of expenses fell to 0.21 up to 13.05%.Among them, financial expenses increased most of the main statements and external financing increased, due to the increase in index expenditure.  Increase in asset impairment losses and ROE decreased by zero.26 units.Due to the increase in bad debts of current accounts and the decline in the value of inventory, the company accrued 1 in 2018.45 million asset impairment losses, an increase of 155 per year.54%.In addition, the net sales margin was relatively reduced by zero.4 up to 8.57%, so ROE is reduced by zero.26 up to 16.66%.  The growth of operating cash flow is higher than the high-speed income, and the investment cash flow exceeds the net fast.Net operating cash inflow of the company in 20184.14 ‰, an increase of 21 per year.05%, higher than the growth rate of 15%.9%.In terms of investment cash flow, the company’s external investment increased, including the payment of the first installment of Huatai Insurance’s equity investment.12 trillion, a net reduction in investment cash flow of 16.920,000 yuan, a year-on-year decrease of 92.09 million yuan.  The advantages in the field of flue gas 苏州夜网论坛 treatment are obvious, and the non-electricity treatment dividends are expected.As an absolute leader in the air treatment industry, the company has obvious advantages in the field of traditional flue gas treatment.At the same time, in the field of non-electrical governance, the leading Matthew effect is increasing.In 2018, the company’s orders increased by more than 30% than expected, reversing the fluctuations in 2017. After successfully passing through the trough period of thermal power governance, the non-electricity governance dividend is expected.  Profit forecast and investment grade: We expect the company’s EPS for 2019-2021 to be 1.00, 1.28, 1.48 yuan, corresponding to PE is 13, 10, 9 times, maintaining the “buy” level.  Risk reminder: orders in the non-electricity field fall short of expectations and execution, the risk of rising raw material costs, and increased competition in the industry