Zhonglan Environmental Protection jointly won the bid for the 1.5 billion project, the stock price rose 5%, and the net profit of revenue continued to deviate from Shenzhen Capital and cashed out 120 million

Yangtze River Business Daily News ● Yangtze River Business Daily reporter Shen Yourong

Zhonglan Environmental Protection (300854. SZ) participated in the consortium to win large orders.

On the evening of June 24, Zhonglan Environmental Protection announced that recently, the consortium in which the company participated won the bid for the "Yulong Landfill Environmental Remediation Project Construction General Contracting" project, with a winning bid price of 1.538 billion yuan.

For participating in this bid, Zhonglan Environmental Protection said that it will have a positive impact on the subsequent market development and business performance.

Affected by this news, on June 25, Zhonglan Environmental Protection shares rose nearly 5%.

Zhonglan Environmental Protection is mainly engaged in the research and development of solid waste pollution prevention and control technology and applied to the construction and operation of pollution prevention and control systems, and will land on the A-share market in 2021. From the year of listing to 2023, although the company's operating income continued to grow, the net profit after deducting non-recurring gains and losses (hereinafter referred to as "non-net profit") continued to decline, and the net profit also began to decline from 2022. In the first quarter of this year, the company's net profit continued to decline, and the non-net profit deducted fell at the same time and turned into a loss, which continued to deviate from the operating income.

Institutional investors Shenzhen Capital and its affiliates have intensively reduced their holdings in Zhonglan Environmental Protection, and so far, they have cashed out about 120 million yuan.

Jointly winning large orders is conducive to market development

A paper announcement of winning the bid has attracted the attention of the market for Zhonglan Environmental Protection.

On June 14, Zhonglan Environmental Protection announced that the Shenzhen Public Resources Trading Center announced the "Announcement of the General Contracting Bidding Results of the Construction of Yulong Landfill Environmental Remediation Project", and the consortium formed by Shenzhen Energy and Environmental Protection Co., Ltd., China Construction Fifth Engineering Bureau Co., Ltd. and Zhonglan Environmental Protection Co., Ltd. was the winning candidate for the project.

On the evening of June 24, Zhonglan Environmental Protection further announced that the company received the "Notice of Winning the Bid" for the "General Contracting of Yulong Landfill Environmental Remediation Project Construction".

The basic situation of the project is that the construction unit is Zhejiang Jiangnan Engineering Management Co., Ltd., and the name of the bid section is the general contractor of the environmental remediation project of Yulong Landfill, with the winning bid price of about 1.538 billion yuan and the winning bid period of 894 calendar days.

How much can Zhonglan Environmental Protection get from the cake with a bid price of 1.538 billion yuan? Zhonglan Environmental Protection did not disclose it in the announcement.

The winning of the bid has a great impact on Zhonglan Environmental Protection. According to the company, the above-mentioned bid-winning project belongs to the company's main business, and the implementation of the project after winning the bid is expected to have a positive impact on the subsequent market development and have a positive effect on the company's operating performance in the relevant construction years.

Zhonglan Environmental Protection has been pioneering in the field of solid waste and industrial waste treatment, focusing on municipal garbage dumps, hazardous waste treatment, coal chemical industry, mining, petrochemical industry environmental protection pollution prevention and control has accumulated rich experience. According to the company, it has undertaken nearly 500 environmental protection projects, provided innovative technologies and environmental governance solutions for government and large enterprise customers, and is currently one of the most well-known and powerful environmental governance enterprises in China.

In recent years, Zhonglan has developed the environmental protection market smoothly and frequently won bids. On March 12 this year, the company announced that it had received the "Notice of Winning the Bid" of the "Suichang County Domestic Waste Landfill Ecological Comprehensive Treatment Project - Landfill Comprehensive Treatment", and the project was won by a consortium composed of Zhonglan Environmental Protection and Zhejiang Luobang Construction Co., Ltd., with a winning bid price of about 120 million yuan and a service period of 22 months to ensure that the project will be completed and accepted before December 31, 2025.

The continuous bidding of related projects shows that the market development of Zhonglan Environmental Protection is relatively smooth, and also lays the foundation for the company's sustainable development.

On June 25, affected by the news of winning the bid, the share price of Zhonglan Environmental Protection rose 17.67% in early trading, but finally rose and fell, closing at 9.80 yuan / share, an increase of 4.93%.

Institutions that increase revenue but do not increase profits reduce their holdings

Although the market development of Zhonglan environmental protection is relatively smooth, the profitability has not been significantly improved.

Founded in 2001, Zhonglan Environmental Protection claims to be a high-tech enterprise specializing in the research and development of solid waste pollution prevention and control technology and its application to the construction and operation of pollution prevention and control systems, and is one of the benchmark enterprises in the field of solid waste pollution isolation and ecological treatment in China. The company practices the concept of green and low-carbon, takes the integrated technology system of ecological landfill as the core, and realizes the effective protection of the whole environment of soil, groundwater and air through the new business model of the whole industry chain of pollution isolation, ecological restoration, resource utilization and comprehensive operation.

The company said that for more than 20 years, it has focused on solid waste pollution prevention and control technology, and has formed an integrated technology system for ecological landfills, mastered a number of core technologies and achieved good application results. The company practices the concept of green and low-carbon, and forms a core technology system of ecological landfill that integrates pollution isolation, ecological restoration, resource utilization and comprehensive operation, which can realize the synergistic advantages of the whole industrial chain coverage of solid waste landfills. The company has successfully undertaken a number of engineering projects with high technical content, difficult implementation and strong industry representativeness.

Excellent technology is an important factor in the smooth development of the market, but the company's revenue does not increase profits.

From 2018 to 2020, in the first three years of listing, Zhonglan Environmental Protection achieved operating income of 393 million yuan, 684 million yuan and 689 million yuan respectively, a year-on-year increase of 25.05%, 74.26% and 0.66%; net profit attributable to shareholders of the parent company (hereinafter referred to as "net profit") was 54 million yuan, 80 million yuan and 99 million yuan respectively, a year-on-year increase of 62.94%, 47.13% and 23.51%; The net profit after deduction was 53 million yuan, 76 million yuan and 87 million yuan, a year-on-year increase of 70.83%, 43.79% and 15.76%.

After listing, from 2021 to 2023, the company's operating income will be 699 million yuan, 723 million yuan, and 836 million yuan respectively, a year-on-year increase of 1.50%, 3.43%, and 15.65%, with three consecutive years of growth; net profit was 102 million yuan, 28 million yuan and 21 million yuan, with year-on-year changes of 2.82%, -72.36% and -27.10%; The net profit after deduction was 57 million yuan, 49 million yuan and 16 million yuan respectively, down 34.88%, 13.60% and 68.38% year-on-year, declining for three consecutive years.

To sum up, in the three years since its listing, Zhonglan Environmental Protection's non-net profit and operating income have deviated for three consecutive years.

In the first quarter of this year, the company's operating income and net profit were 81 million yuan and 06 million yuan respectively, a year-on-year change of 18.69% and -991.33%, and the non-net profit was -08 million yuan, a year-on-year decrease of 1896.06%.

It is worth mentioning that before the IPO, Zhonglan Environmental Protection had twice received investment from Shenzhen Capital Group, and the company was supported by listing, and Shenzhen Capital held a total of 6.94% of the company's equity. Since November 2022, Shenzhen Capital has successively reduced its holdings. Through the reduction of holdings, Shenzhen Capital Group cashed out about 120 million yuan.