China Holdings (603903) Semi-annual Report Review 2019: Steady Operation Adjustments in Cold Winter

China Holdings (603903) Semi-annual Report Review 2019: Steady Operation Adjustments in 上海夜网论坛Cold Winter

Event: The company released the semi-annual report for 2019 on the evening of August 23: the company achieved revenue in the first half of the year4.

40 ppm, an annual reduction of 18%, achieving a net profit attributable to shareholders of listed companies of 4,536.

960,000 yuan, a decrease of 21 a year.

93%, net profit after deduction of 4465.

730,000 yuan, a decrease of 18 a year.

76%.

In this regard, we commented as follows: Key points of investment: The operating business grew rapidly in the cold winter of the industry, and the engineering business took the initiative to shrink. In the first half of the year, the company achieved revenue4.

40 ppm, an annual reduction of 18%, achieving a net profit attributable to shareholders of listed companies of 4,536.

960,000 yuan, a decrease of 21 a year.

93%, net profit after deduction of 4465.

730,000 yuan, a decrease of 18 a year.

76%, the decrease in performance was mainly due to the liquidation of PPP projects and the financing environment of the environmental protection industry. The company reviewed the situation, paid attention to risks, invested cautiously, and actively contracted some projects to overcome risks and increase revenue.Business) to a certain extent, but operating costs increased significantly, the first half of the sewage treatment capacity1.

5.2 billion tons, an increase of 72 in ten years.

11%, revenue from sewage operations2.

68ppm, a significant increase of 204 every year.

41%.

The company’s net cash flow from operating activities was 4,265.

890,000 yuan, compared with -1 in the same period last year.

The substantial improvement of USD 02 million and the marked improvement in cash flow were mainly due to the selection of high-quality projects and the strengthening of the management of accounts receivable.

In terms of period expenses: the company’s selling expenses 2.

13%, an increase of 0 every year.

52pct, basically unchanged; management (including R & D) expenses13.

80%, an increase of 7 per year.

07pct, mainly due to increased investment in research and development and the establishment of two new branches in Anhui and Shaanxi increased labor costs; financial expenses5.

32%, an increase of 2 per year.

95pct, mainly due to increased loans through corporate projects.

Actively reserve technology + expand regional layout. The accumulation of potential energy is yet to come. Orders additionally support business growth. In the cold winter of the industry, the company merged in selected projects and invested cautiously. At the same time, it actively carried out technical reserves and regional layout to accumulate momentum for future development.

The company has mastered technologies such as the “Intelligent Precision Dosing System for Carbon Sources in Denitrification Deep Bed Filters”, “Sludge Alkali Stable Drying Treatment”, and actively promotes the urban-rural ecological complex model.”Underground pollution characteristics identification and system electrostatic research”, etc., continue to consolidate and improve technology.

Adhering to the principle of regional operation, the company has newly established branches such as Anhui and Shaanxi Branches to carry out the nationwide distribution and gradually start to harvest: the company won the bid in August 2019 for the Urumqi Hedong Sewage Treatment Plant and the PPP project for the reconstruction and expansion of recycled water projectsThe total investment is about 6.

8.2 billion is the company’s breakthrough in large-scale projects in the Northwest.

Since 2019, the company has successively shortened the Mercedes-Benz project (53.3 million yuan), the Tangyin farm toilet (undetermined amount) project, the Langfang Guangyang project (89.05 million yuan), and the Langfang Guangyang project (1.

深圳桑拿网 2.4 billion), Urumqi project (6.

82 ppm), etc., with orders in hand currently exceeding 1.3 billion U.S. dollars, and excess orders support future growth of the company.

Earnings forecast and investment rating: Maintain the company’s “overweight” rating.

We are optimistic about the company’s development prospects, and it is expected that the company’s 2019-2021 EPS will be 0.

92, 1.

22, 1.

55 yuan, corresponding to the current expected PE of 15, 11, 9 times, maintaining the company’s “overweight” level. Risk Warning: Risks of project development and implementation being less than expected, risks of increased accounts receivable, upward interest rate risk, risk of shareholder reduction, and macroeconomic downside risk.