China Reinvestment (600217): Performance slightly exceeds expectations
Event: The company released the third quarter report of 2019.
During the reporting period, the company achieved revenue of 24.
310,000 yuan, net profit attributable to mother 3.
21 ppm, increasing by 4 each year after gradual adjustment.
14% and 34.
At 07%, we expect the net profit attributable to mothers to grow by 30% per year, slightly exceeding expectations.
Key points of investment: The amount of dismantling drives the growth of operating income, supplementation is in place, and net profit increases significantly.
During the reporting period, the company’s dismantling business continued to advance, with revenue growing by 4 per year.
In terms of profitability, the company’s gross profit margin was basically flat from the second quarter.
However, according to the investment invitation agreement of the local government and the subsidy for corporate development funds, the government subsidy was in place during the reporting period, and the company’s other income and non-operating income increased, and its net profit slightly 杭州夜网论坛 exceeded expectations.
Revenue-related government subsidies included in the current profit and loss accounted for 34.33 million yuan (among which 34.02 million yuan was included in other income and 310,000 yuan was included in non-operating income). Asset-related government subsidies recognized as non-operating income were 57.79 million yuan.
In addition, due to the reversal of the inventory depreciation reserve, the company’s asset impairment losses fell.
In the third quarter, the company’s asset impairment loss account was -1.
0.6 million yuan, -1 in the same period last year.
85 ppm (after a gradual adjustment), and as a result, the company’s attributable net profit margin increased by 34.
07%, the growth rate is significantly higher than operating income.
Restriction on import of solid waste and optimization of domestic waste power dismantling pattern.
With the implementation of the “Prohibition of Foreign Waste Import and Promotion of the Implementation Plan for the Reform of the Management System of Solid Waste Imports”, the reform of the solid waste import management system has increased, the types and quantities of internal solid waste imports have decreased, and the domestic market has dismantled domestically produced waste electricityThe demand for materials increased, and the market price of bulk dismantling materials fluctuated upward.
Cash flow from revitalizing assets improved.
Increase product sales in a timely manner in accordance with the market of waste power dismantling materials, and at the same time, cooperate with Huatai Asset Management to develop asset securitization business with the fund’s supplementary right to raise 5 funds.
4 billion US dollars to improve the capital turnover rate to improve the company’s tight liquidity situation.
Acquisition and integration are still continuing, and the share of leading cities has been promoted.
As of December 31, 2018, there were a total of 109 companies supplemented by the National Waste Electrical and Electronic Products Disposal Fund nationwide, and 10 of the company’s (sun) companies were among them.
In 2017, we acquired Zhejiang Blue Sky Waste Appliance Recycling and Processing Co., Ltd. and Yunnan Julu Environmental Protection Technology Co., Ltd. as an alternative supplementary list. In 2018, we acquired 100% cash to regenerate the environment, and the company’s business gap in traditional solid waste and hazardous waste supplemented.
During the reporting period, the company issued an announcement to purchase 100% equity of Shandong Huanke held by the company’s controlling shareholder by way of issuing shares and paying cash at a transaction price of 6.
At the same time, 100% equity of Wuhan Sentai Environmental Protection Co., Ltd. was purchased at a transaction price of 3.
This release is sustainable for 5.
07 yuan / share, indeed margin of safety.
In the future, the company will continue to expand revenue scale and regional layout through endogenous extension.
Investment Ratings and Estimates: Do we maintain 2019?
2021 forecast net profit4.
10,000 yuan is unchanged, corresponding to 18 times the 19-year PE estimate.
We believe that the company, as a diversified leader of WEEE and a listed company, has significant channel advantages and is rich in business. The current resources are integrated and the current operator’s shareholding plan is introduced. The rationalization of the mechanism will help the performance to accelerate the rise and maintain the “overweight” rating.
Risk warning: metal prices fluctuate, raw material prices increase