Tianfeng Wuli Team: Rural Revitalization Strategy Helps Dayu’s High Water Saving Performance
[Tianfeng Agriculture Wu Li Team]Dayu Water Saving Depth: The First Share of Rural Rejuvenation-National Rural Rejuvenation Strategy Helps the Company’s Continuous High Growth!
Source: Wu Lihua, editor of agricultural bull stock, according to why we pushed Dayu to save water at this time?
First of all, the rural revitalization strategy will be gradually implemented, and the national investment focus will gradually shift to agriculture and rural areas, and the industry will usher in a golden period of development.
In fact, the Sino-US trade war highlights the weakness of China’s agricultural development, increasing agricultural investment, improving agricultural production conditions, and increasing agricultural production efficiency.
In the construction of high-standard grain, efficient water-saving irrigation is the focus.
Therefore, we believe that the industry’s inflection point has gradually come and will continue to have high growth in the future.
Third, the company’s order and performance acceleration inflection point has already appeared.
In 2017, the company’s new orders increased by 88% and the performance increased by 63%. It is expected that the company’s orders and performance will increase further in 2018.
How to guarantee high growth?
First, the industry is expanding rapidly.
During the “Thirteenth Five-Year Plan” period, the supplementary area of the high-efficiency water-saving irrigation industry will double than that during the “Twelfth Five-Year Plan” period; during the “Thirteenth Five-Year Plan” period, the number of fully-formed and comprehensively-formed villages will be 130,000, compared with only 7 at the end of 2016.
In fact, as the industry leader, the company has obvious competitive advantages and obvious first-mover advantages.
At present, the industry is still in the stage of running horse enclosures. As a leader in the industry, the company has outstanding competitive advantages. At present, it has cooperated with Cathay Pacific Water Conservation (covering the Beijing-Tianjin-Hebei region), Chongqing Water Affairs, Ningxia Water Affairs, Tongliao Water Affairs, Gansu Jinkong, and many other companies.Local water investment and operation platforms and financial platforms have reached in-depth cooperation, which provides a basis for the company’s future order and performance growth!
How to evaluate Dayu ‘s water-saving estimates?
We believe that compared with other PPP projects, the large-scale and high-efficiency water saving constructed by the company has three major advantages in rural sewage treatment plants and rural water supply projects: 1. It is in a high-speed growth stage.Double the number of new rural comprehensive renovations compared to the stock in 2016; 2. Under the rural revitalization strategy, it is a national key support and investment area, and financing costs have been reduced, including policy-based low-interest loans from CDB and ABC.3.
The project has good cash flow, and the infrastructure of the benchmark city (supply, power supply, and gas supply are high-quality assets). The expansion and rural water conservancy projects will also become high-quality infrastructure assets in the future rural areas.
Therefore, we believe that the company’s growth and project scale are better, and it is estimated that it should be higher, and at least 25 times the valuation should be given.
However, the company’s current market value corresponding to the 18-year performance estimate is only 17 times, and the safety margin is high!
Summary 1. The promotion of rural revitalization strategy, transformation of PPP model, expansion and rural water conservancy construction ushered in a period of development opportunities!
During the 19th CPC National Congress, the revitalization of rural areas has risen to the height of national strategy, and agriculture and rural areas will become the top priority of the country’s future development and investment.
During the “Thirteenth Five-Year Plan” period, the state plans to increase the efficiency of water-saving irrigation farmland by 1 billion acres, double the earlier “12th Five-Year Plan” period. The estimated investment is up to 150 billion yuan.The growth rate 深圳桑拿网 of the market scale has reached 15%, and it will exceed 7 million yuan by 2020!
During the “Thirteenth Five-Year Plan” period, the state plans to supplement 130,000 formed villages that have completed comprehensive environmental improvement, with an estimated investment of more than 140 billion yuan, ushering in a high-speed growth period!
In addition, since 2016, the state has vigorously promoted the PPP model in the field of food and rural construction, and strengthened quality supervision. The competitive advantages of leading enterprises have been prominent, and the concentration of the industry has been significantly improved!
2. The company is a leader in the industry, has a strong competitive advantage, and strengthens cooperation. The company’s orders and performance are expected to continue to grow rapidly!
The company is a leading enterprise in the field of efficient water saving in developing countries, and has outstanding advantages in products, channels, design, engineering experience and financing.
In 2017, it entered the fields of rural sewage treatment and rural water supply, and the growth space was further opened.
At present, the company strengthens cooperation with domestic water investment companies and financial platforms that have resource and capital advantages such as Cathay Water Savings, Tongliao Water Affairs, Gansu Financial Holdings, Ningxia Water Affairs, etc., to achieve business synergy, and combine the resources and financial advantages of partners with the company’s industryCombination of advantages.
In terms of specific performance, the partners have practically strong order acquisition capabilities and financing capabilities, while the company has previously advanced engineering operation capabilities to transform the advancement of cooperation, and the company’s order promotes accelerated release.
The company realized new orders in 201729.
USD 6.4 billion, an annual growth rate of 88%. It is estimated that the company can achieve new orders of USD 5 billion and USD 7.5 billion in 2018-2019, and continue to grow rapidly!
3. The project is excellent and in control of future high-quality rural infrastructure assets!
We believe that compared with other PPP projects, the company’s large-scale and efficient water-saving, rural sewage treatment and rural water supply projects have three major advantages: 1. It is in a high-speed growth period. During the 13th Five-Year Plan period, it will increase the effective water-saving area by one.Times, the number of new comprehensive rural renovations has doubled compared to the stock in 2016; 2. Under the rural revitalization strategy, it is a national key support and investment area, and financing costs have been reduced, including CDB and ADB ‘s low-interest loans; 3. The project has good cash flow, and the infrastructure construction of the target city (supply, power supply, and gas supply are high-quality assets). The expansion and rural water conservancy projects will also become high-quality infrastructure assets in the future rural areas.
Therefore, we believe that the company’s growth and project weight are better, so it should be higher.
4. The order acceleration has arrived, and it is estimated that it is still at a low level, and the investment value is obvious!
We believe that the nominal growth of the company’s order-driven performance can be divided into two stages: the first stage is the continuous growth brought about by the accelerated release of orders; the second stage is the beyond growth caused by high performance growth.
We see that the company’s orders in 17 years have entered an accelerated release period and will continue in 18-19 years.
Corresponding to the 18-year performance, the company currently estimates that it is only 17 times. Considering that the company is a beneficiary stock of the rural revitalization strategy and is in the stage of rapid growth in performance, its valuation is at least 25-30 times. The current position investment value is obvious!
The company with a “Buy” rating is a leader in water conservancy construction in developing countries. Under the background of rural revitalization, company orders and performance are expected to usher in a period of rapid development.We estimate that the company’s net profit attributable to its parent will be zero in 2017-2019.
9.9 billion yuan, 3.
04 billion and 4.
7.6 billion, an average of 64.
15% and 56.
66%, EPS is 0.
12 yuan, 0.
38 yuan and 0.
60 yuan, given an estimate of 25 times in 18 years, the target price is 9.
Risk reminders: 1. Changes in national policy; 2. Intense competition; 3. Orders fall short of expectations.
Based on “three rural, three waters”, the company is the leader of national budget water conservancy construction!
Based on “Three Agricultures, Three Waters”, the whole industry chain operation company was founded in 1999. It is the first listed company in the country to specialize in military water-saving irrigation equipment manufacturing and engineering design and construction. Its business has expanded from water-saving irrigation to smart water services., Sewage treatment, safe water supply, aquatic ecological restoration and other fields. It integrates regional ecological planning, design, project construction, product supply, and intelligent project operation services as a system solution integration provider.
According to the company’s official website, the company has formed eight major business sectors: Dayu R & D, Dayu Capital, Dayu Design, Dayu Manufacturing, Dayu Engineering, Dayu Smart Water, Dayu Environmental Protection, Dayu Agriculture.
Dayu research and development, Dayu Research Institute has a total of three bases, two academician workstations, has 300 patented technologies, 30 invention patents.
The academy has been leading the industry’s scientific and technological development, its scientific support and the Ministry of Water Resources, the Chinese Academy of Water Sciences and in-depth cooperation with scientific research institutions.
The company hires the honorary chairman of the International Irrigation and Drainage Committee, and the chief engineer of the Chinese Academy of Water Sciences, Gao Zhanyi, as the chief scientist, continuously improves and innovates the industry, technology, and service concept models, and raises the company’s flag from the perspective of market, technology, and policy.
Dayu Capital has a wealth of senior financial experts to support its industrial development.
At present, the company has established extensive cooperation with various financial institutions such as banks, securities firms, government investment platforms, etc., which provides strong financial support for the company’s future industrial mergers and acquisitions and PPP projects.
Dayu Design, a company’s think tank team, is currently equipped with about 400 people, more than half of which are graduate students, and can provide customers with water-saving irrigation and water conservancy industry professional, comprehensive overall design solutions.
Dayu Engineering, the company’s overall first-level construction general contracting qualification, currently has 500 outstanding project managers, can integrate the overall plan, project installation and construction, and realize industrial chain engineering.
Dayu is intelligently manufactured. There are 11 production bases in the country. The core is to rely on informatization, intelligence, and modernization to carry out research and development of water-saving materials, technological innovation and product manufacturing.
Dayu Smart Water, the four smart water companies of the existing company, integrate intelligent construction of water conservancy, roads, and transportation axes to achieve “sky network” control and “ground network”; committed to information software integration to create a modern agricultural Internet of Things irrigationSystem, using a mobile phone APP to achieve remote control.
Dayu environmental protection, focusing on rural sewage treatment, serves the construction of beautiful villages and rural revitalization strategies.
Dayu Agriculture, a sustainable and professional water-saving irrigation technology and product integration, through improving agricultural planting methods and planting structures, increasing product added value and planting benefits, achieving increased production and income, and exploring new and efficient agricultural planting models.
At present, the company has 31 subsidiaries, of which 12 have a penetrating effect on the company’s performance, mainly concentrated in the northwest region.
The revenues of Gansu Dayu Water-saving Group Water Conservancy and Hydropower Engineering Company, Jiuquan, Tianjin and Wuwei reached 7.
6 billion, accounting for 74% of the company’s total revenue.
The company’s original core business was irrigation water-saving irrigation. It began to enter the rural water supply and rural sewage treatment fields in 2017. At present, the company’s development strategy is based on “three rural, three waters” (that is, farmers’ safe water supply, efficient agricultural water conservation, and rural sewage) Governance), relying on the Dayu model of “design + product + engineering + service”, from “simple manufacturer” to “integrated service provider” across the entire industry chain operation.
In 2017, the company’s performance has entered an acceleration period!
Absolutely, the company’s business scale has been continuously improved through state support for irrigation, water conservation and water conservancy construction.
From 2007 to 2017, the company’s revenue maintained a rapid growth in general, with an annual compound intensity of 24.
In 2016, revenue and net income attributable to mothers increased slightly, and revenue decreased by 11.
28%, net profit attributable to mothers decreased by 1%.
47%, because 2016 is the transition year of the company’s business model (from the traditional bidding mode to the PPP mode), resulting in insufficient increase in bidding orders in that year, and the PPP order cycle is too long, resulting in a 16-year increase in orders and a decrease inRecognized income is also OK.
However, at least 2017, the company’s PPP orders began to gradually enter the right track, and the PPP orders also began to contribute considerable revenue and profits. The company’s performance report in 2017 disclosed that the company realized revenue growth31.
36%, realized profit growth of 62.
93%, the company’s average income and profit began to enter an accelerated growth period.
From the perspective of gross profit margin, the company’s overall gross profit margin has continued to decline after 2011, mainly due to the increasing number of new entrants under the traditional bidding model and the country’s opening to the domestic water-saving market, which has caused increased competition in the industry.
The company ‘s expense ratio also increased during the company ‘s period. Since 2011, the company ‘s staff has expanded significantly, which has led to a large increase in the company ‘s expenses. In 2015, the company ‘s previous channel layout increased by national water-saving investment and achieved gains.The proportion of expenses decreased.
Since 2016, the company’s establishment of new subsidiaries to promote the transformation of the PPP model has led to an increase in costs, but the cycle under the PPP model has led to the recognition and replacement of revenue in 16-17 years, thereby continuously increasing the proportion of management expenses.
It is expected that through the further advancement of the PPP project, the company’s order conversion into revenue will begin to accelerate, and the company’s management expenses will be reduced accordingly.
In terms of overall business, water-saving materials still accumulate the largest share of revenue, but compared to 59 in 2016.
13%, the proportion of half-yearly reports in 2017 has been reduced to 47.
87%; income from water conservation projects was 38 in 2016.
41% decreased to 30.
85%; the decrease in the proportion of budget revenue is mainly due to the consolidation of Hangzhou Design Institute, which has led to a significant increase in design revenue.
From the perspective of profitability, the engineering design business has a higher gross profit margin. The decline in the gross profit margin of the engineering design business in the first half of 2017 was mainly due to the consolidation of the Hangzhou Design Institute (the gross profit level of Hangzhou Design Institute was lower than that of the company’s headquarters); The gross profit margin of water-saving materials and water-saving projects is relatively stable, about 30% for water-saving materials and about 19% for water-saving projects.
The industry is extensive and scattered, and the company is the industry leader!
At present, the enterprises in the water-saving irrigation industry are generally larger in scale and the industry concentration is not high. In recent years, due to the country’s increased support for water-saving agriculture and capital investment, the outlook for the water-saving irrigation industry is promising.Increasing investors, coupled with foreign water-saving enterprises in domestic joint ventures or wholly-owned factories to produce water-saving products, so the industry’s market competition has become fierce.
According to Li Guoying, deputy minister of the Ministry of Water Resources (quoted from Sina News), in 2014, there were water-saving equipment manufacturing enterprises in 2000, with an annual production capacity of more than 30 million acres.
Domestic water-saving irrigation companies can be divided into three categories: one is the few companies with strong technical strength and enterprise scale advantages represented by Dayu water-saving, Jinglan Technology, and Xinjiang Tianye, including Beijing Luyuan Plastics UnionCompanies, Hebei Runnong Water-saving Technology Co., Ltd., Yangling Qinchuan Water-saving Irrigation Equipment Engineering Co., Ltd., Jilin Xifeng Water-saving Technology Co., Ltd., etc .; the second type is foreign capital and joint ventures, which have strong technical strength.However, due to the relatively late entry into the country, the market size is limited, including Ruisheng in Gansu?
Yamet High-tech Agriculture Co., Ltd., Netafim, Eisenbeck, Plasto, Rainbird and other foreign and joint venture companies.
The third category is a large number of domestic small and medium-sized enterprises. These companies have a relatively low level of technology, product quality, and relatively small enterprises. They have certain competitive advantages mainly in market segments and regions.
Judging from the current development, foreign companies represented by Netafim have interchangeable products and technical quality, but their prices are relatively high. They are gradually withdrawing from the low-end market, focusing on high value-added cash crops.Grade agricultural demonstration parks and lawns, gardens, etc.
The company’s products are of high quality, perform well in anticoagulation, irrigation stability, insect bite resistance, etc., and have high competitiveness in some aspects.
In addition, although the technical barriers to entry of water-saving agriculture are not strong, water-saving projects that achieve stable, safe and effective water supply require higher technical requirements and service capabilities.
This requires enterprises to have high-quality and stable water-saving materials, higher design capabilities and production technology, professional construction technology and complete service system. Dayu water-saving, as the industry leader, has obvious advantages.
In the first half of 2017, the company achieved revenue5.
2 ppm, ranking first in the industry, achieving gross profit1.
2.6 billion, second only to Beijing Blue Technology.
In terms of gross profit margin, the company is in the middle of the industry, and there is still room for further improvement.
The promotion of the rural revitalization strategy, the transformation of the PPP model, and the industry ushered in a period of development opportunities!
The rural revitalization strategy advances, and irrigation and agricultural water conservancy construction usher in a period of development opportunities!
On October 18, 2017, the report of the Nineteenth National Congress raised the rural revitalization to the national strategic plan, and put forward more comprehensive development requirements for agriculture, rural areas, and farmers.
In the above-mentioned, the development ideas of urban-rural integration and urban-rural integration mentioned in the 17th and 18th National Congresses, the rural revitalization strategy has been deepened in two aspects: First, agriculture and rural areas have been given priority for development.
Since the current reform and opening up, the development logic of urbanization is generally expected. Rural development is generally in the subordinate position of urban development, which is mainly reflected in: modernized resources are concentrated in urban areas; rural surplus labor is invested in urban construction.
The lag in rural development has become an unavoidable obstacle to building a well-off society.
The prospects for agriculture and rural priority development are from the overall high expectations of the strategic resource allocation in the future. Agriculture and rural areas are expected to truly welcome the favorable policies and strong financial support. Rural infrastructure, including rural sewage treatment, rural domestic water,Agriculture and water-saving sectors will usher in a period of high-speed construction and development.
Second, it represents the subjectivity of rural development and attaches importance to the cultivation of rural industries.
The issue of rural development no longer replaces the dual perspective of urban-rural development. The rural development path no longer starts from the perspective of urban nurturing or radiation, but pays more attention to exploring the endogenous growth mechanism of rural areas.
Under this framework, the prosperity of rural industries is certainly one of its core interests, and it has also been placed first among the five general requirements for the development of the “Three Rural Issues” reported at the Nineteenth National Congress.
In terms of specific measures, policies such as extending the land contract period and merging the three types of rights separation are the keynotes of land ownership; the agricultural socialization service system and the rural financial system are gradually improved; social capital will participate more deeply in the development of rural industries and fullyStimulate the economic vitality of the village itself.
Since then, a series of important conferences and documents have made more specific arrangements for rural revitalization: The Central Rural Economic Conference in December 2017 clearly proposed a timetable for rural revitalization, and defined the policy bonus period for rural revitalization: to 2020In 1949, important progress was made in rural rejuvenation, and the institutional framework and policy system were basically formed.
By 2035, decisive progress will be made in rural rejuvenation, and agriculture and rural modernization will be basically realized.
By 2050, the countryside will be fully revitalized, agriculture will be strong, the countryside will be beautiful, and farmers will be rich.
In February 2018, the Central Document No. 1 mentioned that the agricultural supply-side structural reform was the main line to accelerate the development of modern agricultural industrial systems, production systems, and operating systems; at the same time, it promoted the upgrading and upgrading of rural infrastructure and continued to focus on infrastructure construction.In rural areas, speed up the construction of rural roads, water supply, gas supply, environmental protection, power grids, logistics, information, radio and television and other infrastructure.
In addition, it is necessary to strengthen the institutional supply for the revitalization of the countryside and carry out reforms in the areas of land separation and collective ownership.
It also proposed to open up investment and financing channels and strengthen investment in rural revitalization.
While the public financial budget is tilted towards the “three rural issues” to ensure that fiscal expenditures are compatible with the goals and objectives of rural rejuvenation, social capital is widely absorbed and channels for fund raising are broadened.
In March 2018, the government work conference proposed relevant aspects of agriculture, rural areas and farmers: Promote agricultural supply-side reforms, strengthen agricultural water-saving irrigation construction, improve agricultural science and technology levels, and promote Internet +; deepen rural reform, focusing on land systems such as cultivated land and house sitesReform; promote the development of rural special undertakings, especially rural water supply, supply, and information infrastructure.
The gradual development of the rural areas will be beneficial to the construction of “agriculture, rural areas and farmers” in three aspects.
First, the central government has expanded its budget on public finances to ensure that it is compatible with the objectives and tasks of rural revitalization. Agriculture and rural water conservancy must welcome more government investment. Second, rural revitalization policies aim to cultivate rural industries and revitalize business entities.In the future, more and more social capital will enter the field of agriculture, rural areas and farmers, which will also provide more funds for agriculture and rural water conservancy construction. Third, under the reform of the land system, agriculture will continue to move towards scale, industrialization, and scaleOf agricultural operators will drive demand for agricultural infrastructure.
Strict supervision and transformation of PPP model, leading companies enjoy the industry development bonus!
The state has strengthened supervision over efficient water-saving irrigation and water conservancy construction, management, and transportation, and has carried out extensive extensive development in the development of its water conservancy facilities. The quality of the projects varies, and it is difficult to guarantee the transportation and management in the later stage.Construction, management and transportation efficiency coefficient.
In 2016, the state strengthened the supervision of irrigation and water conservancy construction. The Regulations on Irrigation Water Conservancy and the inspection of water law enforcement trends.
Expand clear water conservancy construction standards, strengthen the management and control of the engineering end; expand the management and operation of reinforced water conservancy projects in the later stage, and improve the use efficiency.
We believe that under the background of stricter supervision, leading companies with strong engineering, management and operation capabilities will usher in good development potential.
The comprehensive promotion of the PPP model in the agricultural / rural area is beneficial to the development of leading enterprises!
The strategy of rural revitalization fully stimulates the endogenous motivation of rural development, which is sufficient to require rural development to “change blood transfusion” to “blood-making” and change from a single financial support to fully absorb social capital.
All parties invest to promote deeper ground participation in the fields of agricultural and rural infrastructure construction.
The addition of social capital will undoubtedly reduce financial pressure, enable rural infrastructure to have more diversified paths, and fully stimulate the advancement of agricultural water conservancy and irrigation and water conservation.
The PPP model has become the key to promoting rural infrastructure construction and industrialized operation.
The “Guiding Opinions on Promoting the Cooperation between the Government and Social Capital in the Agricultural Sector” launched by the Ministry of Finance and the Ministry of Agriculture in 2016 provided policy guidance and support for the agricultural industry PPP for the first time, focusing on supporting the implementation of high standards for social capital.
Since then, the State Council and the Ministry of Water Resources have issued documents to encourage the implementation of the PPP model in the fields of agriculture and rural construction.
We believe that the promotion of PPP in the irrigation and water-saving industry has its essence: first, PPP can effectively enlarge government investment, thereby accelerating the construction of water conservancy infrastructure; second, PPP requires enterprises to be responsible for the construction of projects, and they also need toResponsible for the subsequent operation and management to the end, so as to improve the efficiency of the use of the project; Third, in the context of tightening government finances, the PPP model can optimize the government’s financial situation.
The PPP model is essentially different from the traditional bidding model. First, in terms of order scale, the scale of PPP orders often competes on the scale of several hundred million or even billions of dollars; secondly, in terms of funds, it is not financed by the government.Full contract, or the need for corporate financing; Third, in terms of order content, it is no longer a pure engineering construction, but a one-stop service from design, engineering to operation and management.
We believe that the promotion of the PPP model will greatly benefit the development of leading enterprises and promote the further concentration of the industry.
Progressive supervision and the promotion of the PPP model will accelerate the concentration of the industry. From the perspective of 16 years of development of leading enterprises, the industry has two obvious changes: First, the state has proposed higher regulatory requirements for the construction, management, and operation and maintenance of water-saving projects.At least, it is required to be able to complete the construction of irrigation and water conservancy projects with high standards and quality, and to achieve subsequent effective operation and maintenance and management; the second is the PPP model in the field of irrigation and water conservation construction, which is different from the traditional bidding and PPP model.The large number of engineering orders places higher requirements on the financing capacity of enterprises.
We believe that this change in the industry is more conducive to the development of leading companies with large brand influence, sufficient construction experience, strong financing capabilities, and high levels of operation and maintenance management, and the industry’s concentration will further increase.
How big is the market space for agriculture, rural areas and farmers?
The country promotes the development of irrigation and water-saving irrigation, and the market space of 100 billion levels has opened!
After the stagnant development of domestic efficient water-saving agriculture, the local farmland water conservancy underwent three major periods of water storage irrigation, water lifting irrigation, and water-saving irrigation. Among them, water-saving irrigation was proposed in the 1990s, with a late start and small coverage.
In 2011, the State Council issued the “Decision on Accelerating Water Conservancy Reform and Development”, which proposed that the average annual investment in the next ten years be more than USD 400 billion for water conservancy construction, and the state’s investment in farmland water conservancy will increase.
During the “Twelfth Five-Year Plan” period, the country completed a total of investment in food and water conservancy infrastructure.
61 trillion yuan, with an annual average of more than 300 billion yuan.
It is also from the “Twelfth Five-Year Plan” period that water-saving projects in developing countries have entered a period of rapid development. The areas of sprinkler irrigation, micro-irrigation, and low-pressure pipe irrigation have been increasing.
Despite years of rapid development, the proportion of water-saving irrigation areas such as sprinkler irrigation and micro-irrigation in the previously cultivated land area is gradually being replaced by the United States and Europe, and it is also behind the average level of scale (the average level of reduction is 15).
26%, Jiangsu only 13.
In 2016, the average irrigated area reached 10.
9.8 billion mu, of which the area of sprinkler irrigation and micro-irrigation is only 1.
4.9 billion mu, accounting for only 13.
In the United States, this ratio reached 56 in 2009.
5%, Spain was 73 in 2015.
7%, Israel was as high as 90% in 2000.
Before that, our water-saving agricultural construction was still relatively backward, and there was still ample market space for water-saving irrigation.
The state vigorously promotes the development of efficient agricultural water-saving irrigation!
Extremely, the state vigorously promotes the construction of agricultural water conservancy facilities, especially the construction of water-saving agriculture.
In 2010, the State issued the “Decision of the Central Committee of the Communist Party of China on Accelerating Water Conservancy Reform and Development”, which for the first time made water conservancy construction the subject of “Document No. 1”. It is expected that investment in the next ten years will be no less than 4 trillion for water conservancy infrastructure construction, Axial opened the prelude to the development of critical water conservancy.
Since then, the state has promulgated intensive policies to promote comprehensive reform of water prices and promote the development of efficient and water-saving agriculture.
1. Water price reform promotes the development of efficient and water-saving agriculture. The current water price is far lower than the expansion of mining costs. In 2014, the average cost of domestic water supply for agricultural water was about 25.
52 cents per cubic meter, but the average price of agricultural water is only 9.
23 cents per cubic meter, which is only 36% of the cost, and the agricultural water fee cannot be collected 100%. The actual collection and recovery in 201489.
We believe that the current situation of water consumption, whose price is lower than the cost and the rate of collection is not high, has no response to the scarcity of the threshold value, which is not conducive to economies of scale and efficient use.
With the advancement of agricultural water price reform, we judge that the price of agricultural water will continue to move forward, and the price of agricultural water will continue to increase in the future. With the increase in the actual rate of collection of agricultural water charges, the cost of agricultural water will increase, thereby promoting agricultural water conservationDevelopment of facilities.
The Opinions on Promoting the Comprehensive Reform of Agricultural Water Price, issued in January 2016, officially put the comprehensive reform of agricultural water price on the agenda. Currently, 30 provinces have issued provincial implementation plans, and the implementation plans of each province have made overall arrangements for the reform.
The Pilot Plan for Deepening the Comprehensive Reform of Agricultural Water Prices proposes that on the basis of clear water rights, scale management should be implemented to provide accurate compensation to water-saving users, or to realize the distribution of saved land ownership through the establishment of water rights exchanges.Excessive water consumption is subject to a progressive price increase system, so the incentive effect for water conservation can be increased, thereby promoting the development of agricultural water-saving facilities.
2. Land transfer to promote large-scale operation is conducive to the development of water-saving agriculture. At present, government policies continue to increase compensation for large-scale agricultural planting, and the size of cooperatives has increased significantly, promoting the rapid development of large-scale agricultural production.
Large-scale production and operation organizations such as family farms, large professional households, and farmers’ cooperatives have rapidly increased.
As of the end of 2016, there were 179 farmers’ professional cooperatives in developing countries.
40,000, an increase of 17 from 2015.
18%, still maintaining rapid growth.
Decentralized scale of operation with traditional families, family farms, large farmers, cooperatives have absolute advantages in terms of capital scale and arable land size, can successfully afford the cost of building water-saving agricultural facilities, and the economic benefits of water-saving agricultureIt is also more obvious, which is conducive to promoting the development of water-saving agriculture.
The market space for efficient and water-saving agriculture is in the hundreds of billions!
In terms of construction area, according to the plan of the National Agricultural Water Conservation Program (2012-2020), by 2020, the effective irrigation area of farmland in the country will reach 10 billion mu, and the area of water-saving irrigation projects will increase by 300 million acres.
More than 500 million mu.
During the “Thirteenth Five-Year Plan” period, the country will increase the effective water-saving irrigation area by 100 million acres, and double the amount by 50 million acres in the earlier “Twelfth Five-Year Plan” period.
According to Dayu’s water-saving and Jinglan Technology’s PPP projects for high-efficiency water-saving agricultural irrigation since 2016, the investment per acre has changed, ranging from 2000-4425, but generally around 3,000 yuan (the average is2870 yuan / mu).
We calculate based on an investment of 3,000 yuan / mu. During the “Thirteenth Five-Year Plan” period, an increase of 1 billion acres of high-efficiency water-saving irrigation area will require investment of nearly 300 billion yuan. Assuming an annual increase of 20 million acres, an annual investment of 60 billion yuan will be required.yuan!
However, considering that the construction standards of most farmland water-saving irrigation have not yet reached such a high level, the investment amount will not be so high. Under the gradual bidding construction model, the average investment per mu is about 1,000 yuan. Therefore, the actualThe scale of investment will not reach 300 billion yuan.
We assume that the penetration rate of high-standard construction is 10% in 2017, and the penetration rate of high-standard construction reaches 50% by 2020. Then, the investment of 20 million mu will increase by approximately 24 billion US dollars in 2017, and the investment of 20 million mu will increase by 2020.The amount is about 40 billion!
It is estimated that during the 13th Five-Year Plan period, the investment in efficient water-saving irrigation will reach nearly 150 billion yuan!
In addition, there were stocks of sprinkler irrigation and micro-irrigation in 2016.
500 million acres, there is still a market for updating and maintenance of this part of the stock. We conservatively calculate it at 150 yuan / mu, and the market size of the part of the stock update and maintenance in 2017 also reached 22.5 billion, assuming an annual increase of 20 million in 2017-2019.Acres, the stock area will reach 2 in 2019.
100 million acres, the renewal and maintenance of the stock market has reached 31.5 billion!
We predict that by 2020, the annual efficient water-saving irrigation market will reach 71.5 billion yuan, an increase of 54% over 2017 and an annualized growth rate of 15%.
Cultivated land is divided into two types: paddy field and arid land. Arid land is divided into irrigated land and arid natural arid land. Among them, water-saving irrigation is mainly arid land, and irrigated land is mainly in arid land.
At present, the area of dry land in the country is about 1.1 billion mu, mainly distributed in Northeast, North China, and Southwest China. The sum of the area of dry land in the three regions accounts for 61 of the country’s total.
Heilongjiang Province has the most arid areas in all provinces, with a value of 1.
600 million mu, accounting for 90% of the province’s arable land.
It is divided along the Kunlun Mountains-Qinling Mountains-Huaihe River, and the north is the arid land with an area of 7.
3.8 billion mu, accounting for 66 of the country’s total dry land area.
5%; the south is the arid land in the south, with an area of 3.
7.1 billion mu, accounting for 33 of the country’s arid land area.
More than 50% of the dry land area in China needs irrigation, that is, about 6 billion mu of irrigated land.
At present, the annual irrigated land is mainly used to grow wheat, corn, soybeans and other food crops, which is suitable for the development of sprinkler irrigation.
In addition, in 2013, there were gardens1.
4.5 billion mu, grassland 22.
500 million acres, the grassland is suitable for the development of sprinkler irrigation. The garden is mainly planted with cash crops such as vegetables and fruits to develop sprinkler irrigation and micro-irrigation.
We assume that in the future, the proportion of sprinkler irrigation and micro-irrigation to the irrigated area will reach a predetermined level, that is, the proportion of cultivated land and garden land will reach 70%. Generally, the area of extension of sprinkler irrigation and micro-irrigation will be as high as 5.
2.2 billion mu, we assume that the proportion of pasture grass to achieve sprinkler irrigation reaches 10%, then the area of sprinkler irrigation can reach 2.
25 billion acres.
4.7 billion acres, compared to only 1 in the previous area of sprinkler irrigation and micro-irrigation in 2016.
About 500 million mu, there is huge room for future growth.
Blue sea market for rural sewage treatment opens!
Rural revitalization brings a long-term development trend for rural sewage treatment. Rural sewage treatment and operation is a common problem in emerging rural construction, and it is also a weak alternation in the overall sewage treatment pattern.
Since 2012-2013, the amount of investment in sewage treatment facilities in rural villages and towns has entered a new round of growth period, especially the investment in sewage treatment in rural areas reached 228 in 2016.
800 million US dollars, an increase of nearly 70% over 2013.
Although the amount of investment has increased significantly in recent years, compared to the level of urban construction, the construction of sewage treatment facilities in towns and rural areas is still seriously lagging behind!
As of 2015, the sewage treatment rate in rural cities reached 92%, and the sewage treatment rate in counties reached 85%. In 2016, the sewage treatment rate in rural areas was only 22%. Most rural and rural domestic sewage has not undergone any treatment or is simply treated by septic tanks.Discharged into nearby rivers or discharged from open ground into the ground arbitrarily, many septic tanks were built by farmers themselves, which did not meet the standards.
In 2016, the penetration rate of sewage treatment facilities (the number of sewage treatment facilities / total number) in towns and rural areas is also very low, with only 28 in the built-up areas of towns.
02%, the township built-up area is only 9.
04%, only 20% in rural areas.
At present, a new round of infrastructure construction and upgrading in rural areas is being promoted under the guidance of the rural revitalization strategy. The problem of rural sewage treatment is the core approach to the improvement of rural human settlements.
Following the goals of the “Thirteenth Five-Year Plan” for comprehensive improvement of rural environment, 130,000 newly formed villages will be completed in 2020, and the total number of villages under environmental improvement will reach the maximum.
Driven by the central policy, the enthusiasm of local governments for rural sewage treatment has also greatly increased!
We expect that under the guidance of the rural revitalization strategy and the promotion of the PPP model, the township and rural sewage treatment will usher in a golden stage of development!
The advancement of the river system further promotes increased investment in sewage treatment in villages and towns!
The river length system, which has been fully promoted since 2017, is the key guarantee for the advancement of sewage treatment projects. According to the implementation plan issued by the Ministry of Water Resources and the Ministry of Environmental Protection, the heads of provincial, city, county, and township party and government units directly hang the river length.The title is specifically responsible for the jurisdiction of the area’s water environment, flood control, and jurisdiction of the area’s water body monitoring, and is converted to the jurisdiction’s water environment status and its annual performance evaluation system.
There are two key points in the promotion of the system: First, the environmental protection responsibilities of the expanded leadership and functional departments are concrete and rigid. Therefore, the improvement of water pollution in various regions has become a task of government toleration and mitigation!
Especially the promotion of the river length system to the township level will directly promote the construction of rural sewage treatment!
Second, the river length system has extremely high specifications.
In all regions, there are generally party committees or government leaders who directly serve as river leaders!
For example, the chief river chief of Beijing is Cai Qi, the acting mayor of Chen Jining; the chief river chief of Jiangsu province is the deputy secretary of the provincial party committee and the governor Wu Zhenglong; the chief river chief of Shanghai is the mayor Ying Yong.
Below high standards, it is conducive to the river and lake improvement tasks in various regions to effectively coordinate the various departments and ensure the effective implementation of corresponding measures.
The air force river system has been piloted in Beijing, Tianjin, Jiangsu and other provinces. It will be comprehensively promoted throughout the country after 2017. It is planned to introduce relevant systems and assessment methods before the end of June 2018.
As of November 2017, all city-level, 99% county-level, and 98% township-level programs have been issued; the number of river lengths at the provincial, city, county, and township levels exceeds 290,000, and there are also village-levelThere are nearly 600,000 river lengths; 99% of the country’s municipalities and 97% of the county level have set up river length offices; the six supporting systems required by the central government and the Ministry of Water Resources have been introduced in all 27 provinces.
At present, the river-length system has entered a comprehensive upgrade stage, and the system framework and assessment standards of the river-length system will be basically completed in 2018.
We believe that the advancement of the river length system will provide a strong guarantee for the construction of sewage treatment facilities in various regions, and the current weak sewage treatment links the formal towns and rural areas!
The rural sewage treatment market was launched, and the investment volume during the 13th Five-Year Plan period exceeded 100 billion yuan!
According to the “Thirteenth Five-Year Plan” for the comprehensive improvement of the rural environment in China published in December 2016, as of the end of 2015, the central government has expanded and allocated 31.5 billion yuan in special funds for rural environmental protection to support the country.
The preliminary comprehensive environmental improvement of 80,000 formed villages accounted for 13% of the total number of formed villages in the country.
However, the environmental protection construction in rural areas in developing countries is still seriously lagging. By the end of 2016, 78% of the established villages still had no sewage treatment facilities.
The “Planning” points out that the goal of “replenishing 130,000 formed villages that have completed comprehensive environmental improvement by 2020” is ensured, and 7 that have been cured at the same time.
80,000 formed villages will also continue to improve to ensure the long-term and stable operation of rural environmental protection facilities that have been built.
The investment calculation of rural sewage treatment facilities refers to the rural domestic sewage discharge mentioned in the “Guidelines for Construction and Investment of Rural Domestic Wastewater Treatment Projects” issued by the Ministry of Environmental Protection in 2013. Should the domestic sewage discharge be 40% of the domestic water consumption?
90% calculation, roughly 65%.
The guide also counts the daily water consumption per capita of towns and villages, irrespective of the weight of the North and the South, the average daily water consumption of the village area is about 67.
5L, the per capita daily water consumption in villages and towns is about 110L. Considering that the rural population accounts for less than half of the rural population, we calculate based on the daily water consumption of 85L in rural areas.
Referring to the data in the “China Urban and Rural Construction Statistical Yearbook”, the average population of an organic village is about 1500. According to state regulations, the rural sewage treatment rate is not less than 60%. We calculate according to 75% of the sewage treatment rate, and we can roughly estimate an organizational system.Village’s daily sewage discharge: Daily sewage treatment in multiple villages = population * daily water consumption per capita * sewage discharge ratio * sewage treatment ratio = 1500 * 85 * 65% * 75% = 62 tons / day due to populationThe distribution, sewage water volume, economic development level, environmental characteristics, climatic conditions, geographical conditions, and the current status of the local drainage system and drainage pipe network are different, and it is not possible to directly convert a model of a built-up village sewage treatment project.
In general, to achieve a trade-off in the concentration of sewage treatment, centralized treatment often brings excessive pipe network costs, and decentralized treatment often requires the construction of more sewage treatment plants.
Now referring to the data of sewage treatment projects in some areas for conversion, the investment required for sewage treatment capacity with an average daily sewage capacity of 1 ton is about 1.
On average, the investment amount of a built-up village sewage treatment project (usually multiple villages and towns will be combined) is about 1.
8 * 62 = 1.1 million yuan.
In accordance with the requirements of the “Thirteenth Five-Year Plan” for the comprehensive improvement of rural environment, the goal of adding 130,000 villages to complete environmental improvement will be achieved by 2020, and the total investment scale of the rural sewage treatment market in 2020 will reach USD 143 billion.
At present, the number of conventional villages is about 600,000, and only 7 at the end of 2016.
80,000 formed villages have completed environmental improvement. This is a market that has just started to accelerate, and the overall market investment will exceed 500 billion yuan!
Rural water supply market still has potential for development3.
The construction of the rural water supply system is basically completed, but there is still room for improvement!
After long-term planning and construction of municipal water supply projects, the water supply system in the inner cities and counties has been basically established. In 2016, the water penetration rates in domestic cities and counties were 98.
42% and 90%.
50% has covered almost all permanent residents in counties and cities.
The national rural drinking water safety project construction that lasted 11 years from 2005 to 2015, with a total investment of more than 280 billion yuan, of which in 2005, through the implementation of the rural drinking water safety emergency project, the total investment was 77.
9 trillion, solved the drinking water safety problem of 21.2 million people.
During the “Eleventh Five-Year Plan” period, a total investment of 105.3 billion yuan was made to build a new centralized water supply project22.
10,000 sites, scattered water supply projects66.
10,000 people to solve unsafe drinking water2.
12 billion people.
During the “Twelfth Five-Year Plan” period, a total investment of 16.76 million yuan will be used to build 280,000 new centralized water supply projects to address unsafe drinking water3.
0.4 billion people.
At present, the problem of “difficult drinking water” in rural areas has been basically solved. In 2015, the penetration rate of concentrated water supply in rural areas reached 82.
40%; In 2016, the penetration rate of tap water in rural areas reached 79%, all reaching a high level.
The central budget investment in rural drinking water safety in 2015 was less than 5.2 billion, which was reduced by 19 billion before 2014, and this investment was further reduced to 30 billion in 2016.
However, at the same time, we can see that there is regional imbalance in the development of rural water supply in developing countries, and the water supply coverage rate in eastern coastal provinces is relatively high.
In addition, from the perspective of the built-up area of the town, the built-up area of the town and the village: the water diffusion rate in the built-up area of the town has exceeded 80%, reaching a relatively high level;In 2016, the water use in rural built-up areas reached 71.
90%, while village water use is widespread65.
25%, far below the level of urban water penetration.
Precision poverty alleviation + rural revitalization drive the rural water supply project to complete the “last mile” Rural water supply project is an important part of poverty alleviation and development. According to the “Outline of China’s Rural Poverty Alleviation and Development” by 2020, the rural drinking water problem has been basically solved.The degree of safety and security and tap water penetration rate have further increased.
In February 2018, the Central Document No. 1 proposed that in the construction of rural infrastructure, “the rural living environment should be significantly improved, the construction of beautiful and livable villages should be promoted steadily; the level of equalization of basic public services in urban and rural areas should be further improved.”Being greatly behind the level of cities and towns, the next two years will also become an important change in basic public services in rural areas.
According to the target of the Notice on Strengthening the Improvement of Rural Drinking Water Safety in the 13th Five-year Plan by the Ministry of Water Resources, “By 2020, the centralized water supply rate of rural drinking water in the country will reach 85% or more, the tap water penetration rate will reach 80% or more, and the water quality compliance rate.”It has improved overall.” At present, there is still some room for general water supply project construction, especially in rural construction areas and village areas, and in the vast central and western rural areas.
According to the content of the “Thirteenth Five-Year Plan” for the reform and development of water conservancy projects, the total investment in the central budget for rural drinking water safety projects during the “Thirteenth Five-Year Plan” period totaled 20 billion U.S. dollars, with key support for Yunnan, Sichuan, Hunan, Guizhou and other places.Construction of drinking water projects.
Accelerated landing of PPP orders boosted performance growth, and the company ushered in a high-speed growth period!
Industry leader with outstanding competitive advantage!
Against the background of gradual tightening of regulations and the promotion of PPP, we believe that product quality, industry chain operation capabilities, channel construction capabilities, operation and maintenance capabilities, and financing capabilities constitute the company’s comprehensive competitiveness.
As the industry leader, Dayu Water Conservation has outstanding advantages in all aspects, and it was settled in Yuanmou 3 in 2016.
08 billion dollar PPP orders, the first to reach the scale of PPP order operation experience, in the future is expected to gain breakthrough market share in the era of water-saving agriculture and rural sewage treatment PPP development!
In terms of product quality, it is mainly reflected in the durability of the drip irrigation pipe (belt), the anti-interference ability of the dripper, the uniformity of irrigation, and the water-saving effect.
At present, there are no technical barriers to product quality, and downstream customers have penetrating requirements for product quality. Therefore, product quality is conducive to improving the company’s competition, but it does not constitute a competition barrier.
Dayu’s advanced water-saving production technology, complete products, peer-to-peer product quality, product competitiveness beyond!
Dayu Water Saving is in a leading position in the country in terms of main technical indicators, and has multiple invention patents and utility model patents in the field of water-saving irrigation, thus leading other domestic enterprises.
In terms of industrial chain operation, it refers to the company’s ability to provide the entire chain of service capabilities from design, material production, construction to later operation and maintenance.
The operation capability of the industrial chain is sufficient to enhance the company’s competitiveness when taking orders, and can effectively improve the company’s profitability.
After the acquisition of Hangzhou Design Institute by Dayu Water-Saving, it has formed an entire industrial chain operation from raw material production, engineering design and engineering construction. The industrial synergy effect is obvious, and the engineering experience is far beyond domestic counterparts!
And in terms of engineering construction, the company’s water conservancy and hydropower company has obtained first-level general contracting qualification!
In terms of channel construction, because the orders received by the irrigation and water-saving industry are mainly local governments, and the project is also expanding in various places, perfect and effective channel construction is a requirement for market development, and it also requires future operations and maintenance and future agricultural development.The construction of an investment platform is of great significance.
Dayu’s water-saving model in the country’s distribution of molecular companies and franchise stores is currently the most widely used water-saving company in China, and it is expected to transform the development of the water-saving industry and achieve high growth in orders in the future.
In terms of operation and maintenance capabilities, it means that after the construction of the project is completed, it can provide farmers with technical guidance, maintenance and a series of subsequent services during the period of use.
Operation and maintenance capabilities can improve the user experience, enhance the utilization effect of the project, and effectively enhance the company’s competitiveness when taking orders.
The company’s franchise stores across the country not only undertake the function of sales, but also the function of providing operation and maintenance and technical services for end users. With strong channels and layout and talent team building, the company’s operation and maintenance capabilities are also partSecond to none.
In terms of operation and maintenance experience, the company already has a two-year operating cycle of the Yunnan Hate Tiger Dam project, and the Yunnan Yuanmou project has also entered the operational phase!
In terms of financing capacity, it is mainly under the PPP mode that investment in projects requires social financing by the enterprise. Therefore, financing capacity constitutes the key point for the enterprise to carry out PPP project layout.
As a listed company, Dayu Water Savings has much better credit than its competitors in the industry and has strong financing capabilities. It has established a 10 billion US dollar fund with Ping An Trust and 10 billion Gansu Irrigation and Water Conservancy Investment Fund with Gansu Gold Holdings.The development of future PPP projects provides the foundation for building an IDE.
At present, the company has set up Dayu Capital, and has formed strategic cooperative relations with a number of banks, securities firms, government investment platforms and other financial institutions, for the company’s industrial restructuring and PPP projects to obtain financing scale of 50 billion!
The nationwide layout has been achieved, the industry development dividend is enjoyed, and the investment in the framework agreement is nearly 400 billion!
As the business of these festival water-saving irrigation industries is mainly government projects, it depends on cooperation with local governments. Especially under the traditional bidding mode, local enterprises have more advantages. Therefore, most of the water-saving irrigation enterprises are relatively safe.An, based on local operations.
Dayu water saving began to be distributed throughout the country as early as 2011. At present, Dayu water saving has 23 subsidiaries located in various regions of the country. Dayu water saving has been shown in the six major geographical regions!
Compared with the current three listed companies in the irrigation and water-saving sector and the new three-board companies, taking the proportion of business revenue in the region as an indicator, Dayu ‘s water-saving concentration is the lowest among these companies.More than 40% of the business of the remaining water is distributed in other regions. In the field of irrigation and water conservation, the company is currently in the most advantageous channel advantage.
Since 2014, the company’s regional distribution in the country has begun to transform into a government that has increased the speed of water-saving agriculture and has generated benefits.
In 2015, the company’s orders in Guangxi reached more than 200 million, and in 2016, more than 3 billion PPP orders were placed in Yuanmou, Yunnan, and orders in the southwestern region began to gradually increase.
From the second half of 2016 to 2017, the company’s overall layout in the country has resulted. The scale of the investment framework agreement that has been shortened has reached 40 billion!
Strengthen cooperation, company orders are expected to accelerate the volume!
Since the second half of 2017, the company has adopted a new business development model: cooperation with regional water companies with conventional backgrounds, making full use of the resource advantages of partners and the industrial advantages of Dayu’s water-saving industries to form business synergy!
Cooperate with Cathay Pacific to save water and cultivate the Beijing-Tianjin-Hebei market.
In November 2017, the company obtained a 19% stake in Beijing Cathay Water Saving Development Co., Ltd. through auction, and the auction price was 19.51 million yuan.
After the auction, the company became Cathay Pacific’s second largest shareholder.
Beijing Guotai Water-saving Development Co., Ltd. is a core shareholder of Beijing Guotai Xinhua Industrial Co., Ltd., China Water Investment Co., Ltd., and three water investment entities in Beijing, Tianjin and Hebei, under the comprehensive development management center of the Ministry of Water Resources.Beijing was established and its major shareholders were incorporated into domestic enterprises.
It can be seen that the background of the shareholders of Cathay Water Savings has been strengthened. Through cooperation with Cathay Water Savings, we can assist Cathay Water Savings to expand its business fields and carry out business in the areas of product design, engineering construction, especially agricultural water saving and sewage treatment.Expansion; expansion, and more importantly, the company can fully overcome the financing capacity of Cathay’s water-saving core shareholders and its influence in the Beijing-Tianjin-Hebei region and increase the development of Beijing-Tianjin-Hebei business.
In addition, the company is gradually increasing cooperation with various water investment companies, local financial control platforms, scientific research institutes and other institutions to integrate industry resources, achieve business synergy, and promote the company’s business development.
In December 2017, the company pre-winned the PPP project for the consolidation and improvement of rural water supply in Zoucheng, with a project investment of 5.
2.6 billion, marking the company’s formal entry into the rural water conservancy field.
We expect that the state ‘s investment in agricultural and rural water conservancy construction will increase, and the company ‘s channel layout is intensifying. Company orders are expected to usher in a period of rapid growth!
With the advancement of internationalization, overseas business is expected to continue to grow rapidly!
As the first water-saving irrigation company to go to sea, Dayu Water-Saving has already established business in more than 30 countries including the United States, Thailand, South Korea, and Iran.
From the perspective of foreign business development, in 2012, the company’s overseas revenue was only 433.
470,000, after several years of steady development, by 2016 it had reached 3740.
90,000 yuan, accounting for 3 of the total revenue.
In 2017, Dayu Water-Saving’s overseas business has been harvested frequently. Since the end of 2016, 3 overseas businesses have been finalized and 1 cooperation intention has been reached.
Especially with Thai SAVALIN CO.
LTD’s further sales contract of 1.6 billion in the next 10 years provides a guarantee for the company’s overseas business development.
Not only that, the company and overseas exchanges also increased. In November 2017, Dayu Water Saving Group Co., Ltd. participated in co-organizing the “Shanghai Cooperation Organization Water-saving Irrigation Training Course” and the “2017 Egypt Irrigation and Scale Development and Management Research Course”Is in line with the country’s “Belt and Road” development strategy.
We expect that due to the lack of standards in Central Asia, Africa, the Middle East and other countries along the Belt and Road, most countries have backward water-saving technologies and obvious market demand. Therefore, the implementation of the national Belt and Road policy and the company’s overseas business revenue willContinuous and rapid growth.
We expect that in 2017, the company’s overseas business revenue will exceed US $ 100 million, which will nearly double every year, and it is expected that it will maintain high growth in 2018, with overseas revenue reaching 1.
500-200 million yuan!
5．Core assumptions for profit forecasting and investment advice: The company’s new orders for 2018-2019 are 5 billion and 7.5 billion yuan.
“Buy” rating: The company is a leading enterprise in agricultural and rural water conservancy construction. Under the background of rural revitalization, the company’s orders and performance are expected to usher in a period of rapid development.
We estimate that the company’s net profit attributable to its parent will be zero in 2017-2019.
9.9 billion yuan, 3.
04 billion and 4.
7.6 billion, an average of 64.
15% and 56.
66%, EPS is 0.
12 yuan, 0.
38 yuan and 0.
Considering the company’s vast industry growth space, it is estimated to be 25 times in 18 years with a target price of 9.
The company estimates and analyzes the ratio with other PPP projects. The large-scale and efficient water-saving projects built by the company have three major advantages in rural sewage treatment and rural water supply projects: 1. It is in a high-speed growth period.Double the number of new rural comprehensive renovations compared to the stock in 2016; 2. Under the rural revitalization strategy, it is a national key support and investment area, and financing costs have been reduced, including policy-based low-interest loans from CDB and ABC.3. The project has good cash flow, and the infrastructure construction of the target city (supply, power supply, and gas supply are high-quality assets). The expansion and rural water conservancy projects will also become high-quality infrastructure assets in the future rural areas.
Therefore, we believe that the company’s growth and project weight are better, so it should be higher.
From the perspective of ROE, after the company’s 2018 results are released, the company’s ROE ranks among the most comparable companies with the strongest profitability, so the company’s earnings should also be higher.
According to the 2018 PE / ROE, the company level is the lowest, only 90, while the average level of other comparable companies is 120, and the highest is 136.
We believe that the company’s growth and project viscosity averages are better, so its valuation should also be higher. If we calculate based on the PE / ROE of 136 in 2018, the company’s reasonable valuation in 2018 is 25.
5 times, we conservatively give the company 25 times the estimate, the target price is 9.
Risk warnings 1. National policy changes; 2. Intense competition; 3. Orders fall short of expectations.
Note: The research report of Tianfeng Securities Research Institute has been publicly released during the report section in this article. For details of the report content and relevant risk warnings, please refer to the full report.
Securities Research Report “Dayu Water-Saving (300021): National Village Revitalization Strategy Helps the Company to Continue High Growth!
》 Published on March 23, 2018 The report issuing agency Tianfeng Securities Co., Ltd. (has been licensed by the China Securities Regulatory Commission for securities investment consulting business qualifications): S1110517080004