Wangneng Environment (002034): Significant platform advantages of waste incineration power generation operation to help future growth

Wangneng Environment (002034): Significant platform advantages of waste incineration power generation operation to help future growth

In 2017, Wangneng Environment transformed into a waste incineration power generation operation company through asset reorganization. It has excellent asset placement, good profitability and cash flow. Based on Jiangsu and Zhejiang, it expands its business to the whole country, builds a platform layout, and has a significant competitive advantage. It is expected that the futureDeterministic contradiction in performance growth.

Covered for the first time and given a “Highly Recommended-A” rating.

  In 17 years, the main business of asset reorganization was changed, and the waste incineration power generation operation business had obvious advantages.

The company’s predecessor was Zhejiang Meixinda Printing and Dyeing Group Co., Ltd., a company listed on the Shenzhen Stock Exchange in 2004. Its main business is printing, dyeing, manufacturing, processing and sales of textiles.

Asset reorganization was completed in 2017, all the revenue from textile printing and dyeing assets was placed in the waste incineration power generation industry, and the name was changed to Wangneng Environment. The main business was changed to waste incineration power generation, and it was committed to creating a platform-based environmentally friendly enterprise and treating 杭州桑拿 kitchen waste, Sludge treatment, and environmental restoration.

The company’s waste incineration power generation asset class is excellent, the operating projects have overlapping stability, profitability and cash flow are good, and its competitive advantage is obvious.

  Government support + stable market, promising prospects for waste incineration power generation market.

The “Thirteenth Five-Year Plan” states that in 2020, the city’s municipal solid waste incineration treatment capacity will account for more than 50% of the total harmless treatment capacity, of which the eastern region will reach more than 60%.

In 2018, incineration treatment capacity accounted for 47% of the total harmless treatment capacity.

59%, there is still room for further improvement.

In the harmless treatment method, the incineration treatment 南宁桑拿 amount is 24 in 2004-2018.

98%, the rate of waste incineration increased rapidly, the volume of sanitary landfills decreased, and the objects of treatment also changed from domestic waste to incineration residues.

As the volume of waste removal and transportation continues to increase, the incineration alternative landfill is further promoted, and the future market prospect of the incineration power generation industry is promising.

  Technology upgrade and sufficient project reserves ensure the company’s future performance growth.

The company uses grate furnace technology to replace traditional fluidized bed technology, optimize management and production methods, and strive to manage information and intelligent production.

The company’s projects are based in Zhejiang Province and continue to expand to other provinces in China.

As of the third quarter of 2019, the company has put into operation 23 incineration power generation projects, with a total designed processing scale1.

53 initial / day, of which the project design scale of Zhejiang Province is 8450 tons / day, accounting for 55.

41% have a location advantage.

The company has 19 incineration power generation projects under construction or in preparation, with a total design scale of 1.

43 daily / days (excluding Changting and Xiuwu projects), excess project reserves will ensure the company’s future performance to grow rapidly.

  Expanded the business of restaurant and sludge sector, and entered the environmental restoration sector.

Up to now, the company has invested in 9 kitchen and kitchenware project companies in Zhejiang, Henan, Shandong and other provinces. Among them, Huzhou food kitchen has been put into operation as the company’s first kitchen kitchen treatment project. It has invested in 5 sludge harmless disposal projects, of whichTaizhou sludge project and Xuchang sludge project have been put into operation smoothly.

The company established the Environmental Remediation Division, a wholly-owned subsidiary, Zhejiang Wangneng Environmental Remediation Co., Ltd., to expand into the field of environmental remediation.

Under the combined effect of policy dividend and market demand, the company is expected to form a new growth point of performance.

  Covered for the first time and given a “Highly Recommended-A” rating.
The company is a high-quality waste incineration power generation company with good profitability and cash flow. Based on Jiangsu and Zhejiang to expand its business across the country, it will build a platform-based layout with significant competitive advantages and a definitive alternative for future performance growth.

It is estimated that the company’s attributable net profit for 2019-2020 will be 4 respectively.

07, 5.

36, 6.

350,000 yuan, corresponding to PE14.

9, 11.

3, 9.

5 times.

Covered for the first time and given a “Highly Recommended-A” rating.
  Risk reminders: Waste incineration power generation subsidies may be reduced; financing costs will increase; project commissioning will be lower than expected.