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Zhuhai project EIA is approved for over-scale, and its performance can be increased.

Westdollar.com April 15, 2019 00:00 Soochow Securities Yuan Li View original PDF

Dongjiang Environmental Protection (002672)

Investment points

Event: The company recently obtained the environmental impact assessment of the Zhuhai Green Industrial Service Center project by the Guangdong Provincial Department of Ecology and Environment, and approved the disposal and disposal of hazardous waste scale of 246,000 tons/year, involving 23 major categories. At the same time, the company agreed to set up a 100% wholly-owned subsidiary of Zhuhai Dongjiang Environmental Protection.

 The actual approved hazardous waste treatment exceeded the initial investment agreement by 41%. The Zhuhai Green Industrial Service Center project is one of the basic supporting facilities of Zhuhai Fushan Industrial Park. It will provide environmental protection supporting services such as hazardous waste treatment for the industrial park and Zhuhai City. The planned area is about 93,400 square meters, and the investment amount is not lower than 3.8 billion yuan. The actual approval scale of the project reached 246,000 tons (including 30,000 tons of incineration, 35,000 tons of materialized materials, 180,500 tons of resources, and 0.05 million tons of transshipment, involving 23 major categories of hazardous waste), exceeding the initial investment agreement scale of 175,000 tons. 41%. In addition, the company has agreed to set up a 100% wholly-owned subsidiary of Zhuhai Dongjiang Environmental Protection Co., Ltd. to be responsible for the investment operation of the project. The ring is rated as the most critical part of the pre-procedure of hazardous waste projects. After the large-scale project is approved, it will contribute to the company's future performance growth.

Mature industrial parks guarantee a stable source of supply. Established in 2009, Zhuhai Fushan Industrial Park is located in the core area of ​​Dawan District, Guangdong, Hong Kong and Macao. The total planned area is 153 square kilometers. 417 well-known enterprises and national high-tech enterprises have been brought together. At present, there are 90 large-scale industrial enterprises, 65 high-tech enterprises and 5 world top 500 investment enterprises. In the future, it will become an important advanced electronic information industry manufacturing base in South China. The mature development of the park and the abundance of industrial enterprises will provide stable guarantee for the supply of hazardous waste materials. Through the implementation of this project, the company can effectively undertake industrial waste treatment in Fushan Industrial Park and Zhuhai City, improve the business layout in the Pearl River Delta and even Guangdong, Hong Kong and Macao Dawan District, and form effective synergy with existing Zhuhai, Jiangmen, Foshan and other projects. The company's market share and core competitiveness, increased business performance.

The planning of Guangdong, Hong Kong, Macao and Dawan District focuses on environmental protection areas such as hazardous waste. The "Guangdong, Hong Kong, Macao and Dawan District Development Plan Outline" clearly states that it is necessary to strengthen the capacity of coordinated treatment of hazardous waste areas, strengthen cross-border transfer supervision, and improve the level of harmlessness, reduction and resource utilization of solid waste. The company is the only provincial-owned state-owned hazardous waste disposal platform in Guangdong Province, and is expected to fully benefit from the development opportunities brought by Guangdong, Hong Kong and Macau.

The industry leader in the excellent track. The upstream of hazardous waste is mainly large-scale industrial enterprises, with stable profitability, strong sense of compliance, and transparent charging mechanism. The industry has the advantages of clear business model, excellent customer qualifications and stable operating cash. Moreover, the existing hazardous waste disposal capacity is in short supply, and the water explosion incident is accelerating the standardization. As the leader of the hazardous waste treatment industry, the company has 44 categories of hazardous waste management qualifications in 46 categories of national hazardous waste. At present, there are 7 major projects under construction and 7 major proposed projects. It is expected that more than 500,000 tons/year of disposal capacity will be added after all the above projects are put into production.

Looking forward to the improvement of corporate governance brings operational efficiency. In November 18, the company released the chairman's compensation plan linked to the company's performance. The new leadership was also in place before the end of February 19th. The improvement of corporate governance is expected to further enhance the efficiency of business operations management.

Earnings Forecast and Investment Rating: We expect the company's EPS for the year 19-21 to be 0.58, 0.75, and 0.91, respectively, corresponding to 23, 18, and 15 times for PE, maintaining a “Buy” rating.

Risk Warning: Dangerous waste projects are not progressing as expected, and hazardous waste disposal prices are falling.

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Dongjiang Environmental Fundamental Data
  • Total share capital of 886 million shares
  • Circulating shares of 654 million shares
  • Earnings per share 0.46 yuan
  • Undistributed profit per share 2.81 yuan
  • Net assets per share 4.56 yuan
  • Return on equity 10.57%
  • Net profit of 40,791.70 million
  • Net profit growth rate -13.83%
Dongjiang Environmental Protection Investment Rating
Overall rating within one month
Overall rating in March
Statistical period Buy Overweight neutral Reduction Sell total
Within one month51000015
Within three months71300020
Within six months171900036
Within a year282900057
Dongjiang Environmental Profit Forecast
                                index 2017A 2018E 2019E 2020E
Earnings per share (yuan) 0.53 0.46 0.67 0.82
Net profit (100 million yuan) 4.73 4.08 5.93 7.24
name Quote change Number of research reports Institutional investment rating (nearly six months)
Buy Overweight neutral Reduction Sell
Shanghai Washing 3.85% 10 6 4 0 0 0
Zhong Zaihuan 2.73% 4 3 1 0 0 0
Willy 2.10% 3 3 0 0 0 0
Enlighten Sander 0.27% 12 5 7 0 0 0
Three-dimensional wire 0.00% 0 0 0 0 0 0
Scorpio environment -0.55% 0 0 0 0 0 0
Century Star Source -0.78% 0 0 0 0 0 0
Peng Yi Environmental Protection -0.85% 1 0 1 0 0 0
Shanghai environment -1.02% 6 1 5 0 0 0
Xianhe Environmental Protection -1.07% 16 11 5 0 0 0
Holding shares -1.09% 1 0 1 0 0 0
CLP Environmental Protection -1.10% 1 0 1 0 0 0
Strait Environmental Protection -1.11% 0 0 0 0 0 0
God fog environmental protection -1.24% 0 0 0 0 0 0
Xingyuan environment -1.26% 0 0 0 0 0 0
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