Urban Development Environment (000885): Gorgeous Transformation to Create Quality City Operators
Gorgeous transformation, committed to creating high-quality city operators: the company’s predecessor, Tongli Cement, in September 2017, replaced the assets of Xu Pingnan Expressway, a subsidiary of the Henan Investment Group, with all the cement assets, and its main business was adjusted to expressways.Investment, construction and operation management are the main components, supplemented by municipal water supply related infrastructure investment, construction and operation management.
In September 2018, the company was renamed Chengfa Environment, and its main business added environmental project investment, operation and management to the entire industry chain.
The major shareholder, Henan Investment Group, has started to build the company into this environmental protection platform.
In January 2深圳桑拿网019, the company acquired Huaxian Urban Development Investment Company and officially began to enter the field of waste disposal.
With the implementation of Henan’s policies, the market for incineration power generation is huge.
In November 2018, the Henan Provincial Development and Reform Commission and the four departments jointly issued the “Special Medium- and Long-Term Plan for Henan Municipal Solid Waste Incineration and Power Generation (2018 to 2030)”, aiming to achieve a municipal solid waste incineration capacity of 3 in 2020.
Over 2 days / day, the total installed capacity is about 600,000 kilowatts, and the proportion of domestic garbage incineration treatment capacity to the total harmless treatment capacity reaches more than 40%.
By 2030, the province will form an innocuous treatment system for domestic 合肥夜网 waste that is mainly generated by incineration and power generation. Under the conditions, the municipalities under the jurisdiction of the province will realize “zero landfill” of primary waste, and the province’s domestic garbage incineration treatment capacity will reach 8.
4 Daily, the total installed capacity is about 1.6 million kilowatts, and the waste incineration treatment capacity accounts for about 70% of the harmless treatment capacity.
As of the end of 2018, Henan Province had approximately 7850 tons / day of domestic garbage in operation, with a total installed capacity of approximately 12.
90,000 kilowatts, domestic waste incineration treatment capacity accounts for less than 30% of the total harmless treatment capacity, Henan Province has a huge market space for waste incineration industry.
The bidding market for incineration projects is hot, and the urban development environment highlights its advantages: on January 9, 2019, there were 20 bidding projects in Henan Province, with a total of more than 2 projects with disclosed processing scales.
6 Daily / day, the city’s environment won the most bids for waste incineration power generation projects, with a processing scale and investment of 11,850 tons / day and 49 respectively.
9 trillion, accounting for 43 of the total size of the bid and the total investment.
7% vs. 43.
According to the company’s official website, the company plans to reach a solid figure of 3 digits per day by the end of the 13th Five-Year Plan.
In terms of processing fees and ton investment, the average processing fee for projects that have won the bid is 66.
9 yuan / ton, second only to Kangheng Environment (69.
7 yuan / ton), China Teana (68 yuan / ton).
The investment amount per ton is about 56.
70,000 yuan / ton, which is not much different from the investment in tons of other companies in the province.
The high level of urban development environment plus the average ton investment level provides guarantee for the project’s profitability.
The highway assets are of high quality and provide stable cash flow: The highway assets owned by the company are mainly Henan Xupingnan Expressway Co., Ltd., which is mainly responsible for the operation and management of Xu Pingnan, Anlin and Linchang Expressway, with an operating mileage of 255 kilometers.
The Xupingnan Expressway is an important passageway in the best southwest of the Central Plains; Anlin Expressway is an important cultural tourism, including the ruins of Yinxu Palace Ancestral Temple, Taihang Grand Canyon, Hongqi Canal, etc .; Linchang Expressway is a fast land passageway in Shandong PeninsulaIt is an important channel for Jinmei Outbound Transport.
The road traffic business provided the company with stable cash flow and provided stable financial support for the subsequent construction of waste incineration projects.
The operating cost of this business mainly comes from road maintenance, which can keep the gross profit margin above 65%, and has extremely strong profitability.
As the Group’s environmental protection platform, it is expected to further integrate the Group’s environmental protection-related business: At present, the operating body of the infrastructure sector of Henan Investment Group is changed to Urban Development Environment and Urban Development Investment, and Urban Development Investment is the management company of Henan Investment Group ‘s infrastructure management company., Its main business scope includes investment, construction and operation of urban infrastructure projects such as municipal utilities, environmental protection, public welfare, logistics, etc., and has established close ties with Zhengzhou Airport Port Area, Hebi, Changyuan, Xuchang, Luohe and other areas and has undertakenA number of PPP projects involve roads, infrastructure reconstruction, river management, underground pipeline networks and tap water. The city’s investment belongs to projects under construction including water services, highways, incineration and power generation.
According to the company’s announcement, in January 2019, Chengfa Environment acquired Huaxian Chengfa Investment Company from Chengfa Investment to enter the waste incineration power generation field. As the Group’s environmental protection platform, the company has further integrated Chengfa Investment’s environmental protection-related businesses to make it more effective.Management possible.
Investment proposal: As a new army of waste incineration, the company will accelerate the growth of its performance through the construction and commissioning of the project. It is expected that the company’s EPS for 2019-2021 will be 1.
82, the corresponding price-earnings ratios are 7.
6 times, 6.
6 times and 5.
Buy-A investment rating is given for the first time, with a 6-month target price of 13 yuan.
Risk warning: the project construction is less than expected, the risk of highway toll drops, the financing progress is less than expected, the waste incineration power generation subsidy is downgraded, and the share price is uncertain.