The result goes beyond the expected

As the 2014 whole-year result released by the company, its whole-year revenue has recorded RMB 1.226 billion, up 26% yoy; EBITDA has recorded RMB 374 million, up 26% yoy; and a net profit affiliated to the company's shareholders has recorded RMB 142 million, down 5% yoy. The primary reason for the decrease was that the company's IPO has cost RMB 13.515 million in 2014. With the EPS being RMB 0.16, its result has greatly exceeded the market and our expectation.

Project construction speeds up

The company has recorded RMB 312 million for its waste power operation service revenue, substantially up 55% yoy. Its Huizhou Landfill is already being operated at present, and its waste power projects in Anshun and Jurong will be completed by the end of the year, thus its operation service revenue of 2015 will continually bring a substantial increment. The company has recorded RMB 818 million for its waste power construction revenue, up 14% yoy. The company's construction revenue substantially exceeding the expected is majorly because the construction speed of 3 waste power plants is faster than expected, which can also put these projects into operation earlier and elevate economical values. It is predicted that in 2015 the company will have new projects at a scale of around 3,000 tons in succession to be started on construction, and the substantial increment of construction revenue is optimistic.

Valuation

This time, the company's result hugely exceeding the expected is not only an embodiment of its projects smoothly being constructed, but also a symbol of its future result being shown in advance. We predict that the company will maintain the status of having a high increment in the future three years, and we set its 12-month target price at HK$ 5.44, equal to 21 times/15 times the 2015/2016 expected price-earnings ratio, thus it is "Accumulate" rating. (Closing price as at 26 March 2015)

Financials

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