\u3000\u3000 Road Environment Technology Co.Ltd(688156) (688156)
Take high water content waste as the fulcrum and actively transform distiller's grains into resources. As a high-tech enterprise focusing on the treatment and resource utilization of high water content waste, the company takes the traditional business of river and lake sludge and engineering mud treatment as the fulcrum and transforms to the resource utilization of distiller's grains and other emerging businesses. In recent years, the company has strengthened its transformation, and the proportion of distiller's grains resource utilization business has continued to increase, from 4.8% in 2017 to 21.2% in 2020. The company's performance increased significantly in 2021. According to the performance forecast, the company expects to realize a net profit attributable to the parent company of 65 million yuan to 80 million yuan in 2021, with a year-on-year increase of 36.15% to 67.57%.
Since the transformation from tog business to tob business, the performance certainty and sustainability have been improved under the mode transformation: the company's traditional main business of high water content waste treatment is mainly operated in the business mode of investment construction and factory operation, and the downstream customers are mainly local governments. The order volume is greatly affected by the investment of local governments in environmental protection industry, and the payment collection cycle is generally long. The company vigorously expands the resource utilization business of distiller's grains, takes product production and sales as the business model, and the downstream customers are mainly large feed breeding enterprises in China. The payment collection cycle is shortened. Under the background of strong demand for distiller's grains and feed, the performance certainty and sustainability are significantly improved.
Chinese Baijiu and its Maotai Baijiu are expected to become one of the mainstream processing methods of distillers' grains in 2020. According to our calculations, the output of distillers' grains and Maotai flavor distillers' grains in China in 2020 is about 22 million 230 thousand tons and 1 million 800 thousand tons. The downstream distiller's grains feed industry has strong demand. Under the policy of "limiting resistance and prohibiting resistance", the importance of fermented feed integrating nutrition and functionality is highlighted. According to our calculation, the demand for fermented feed addition is expected to reach 11.582 million tons in 2021. Under the surge of demand, the company vigorously expanded its production capacity. According to the company's announcement, as of 2021h1, the company's distiller's grains feed production capacity was 70000 tons / year. It is expected that the annual production capacity of distiller's grains recycling from 2022 to 2024 will reach 110000 tons, 220000 tons and 300000 tons respectively. At present, the unit price of the company's distiller's grains feed products is lower than the spot price of corn soybean meal, with high cost performance, strong industry demand and product advantages. It is expected that the unit price of distiller's grains feed products will still have a large upward space in the future, which will further increase the profits of the company's distiller's grains resource sector.
From the lees recycling to biotechnology development, the deep moat has been built. The company independently develops the microbial solid state fermentation technology system of organic residue, and produces nutritious and functional fermented feed with better nutritional value of Maotai flavor baijiu. It has successfully entered the large feed breeding enterprises such as New Hope Liuhe Co.Ltd(000876) , modern animal husbandry, etc., and established a wide range of sales channels. With the technology maturing and the future downstream demand increasing, the company is expected to further expand its resources to Luzhou flavor, Fen flavor Baijiu and brewer's grains and soy sauce residues. In addition, the company actively arranges the resource utilization business of organic waste, uses microbial insect collaborative Biodegradation Technology to efficiently treat solid organic waste, realizes resource utilization and produces insect protein feed, and further expands to the field of biotechnology.
The growth of traditional business is steady, and the replication and promotion ability of factory operation mode is strong. In terms of traditional river lake sludge and engineering mud treatment, the company relies on the independently developed mud dehydration and consolidation integrated technical system and adopts the industrialized operation mode, which has the advantages of long operation time, large treatment volume, high equipment efficiency, regional centralization and strong reproducibility. With the promotion of a series of relevant policies such as the 14th five year plan and the ten articles on water, the treatment of river and lake sludge and engineering mud has attracted attention. As the first listed enterprise specializing in the treatment of high water content waste and industrial waste residue, the company has formed a high competitive barrier in the industry, and its business scope has gradually expanded from the Yangtze River basin such as Hubei, Zhejiang and Jiangsu to the whole country, It is expected to maintain steady growth in the future.
Investment suggestion: we expect the operating revenue of the company from 2021 to 2023 to be 347 million yuan, 506 million yuan and 752 million yuan respectively, with growth rates of 38.5%, 45.8% and 48.6% respectively; The net profits were 71 million yuan, 111 million yuan and 176 million yuan respectively, with growth rates of 49.5%, 55.3% and 58.7% respectively; Maintain the investment rating of Buy-A, and the six-month target price is 33.0 yuan.
Risk tip: the policy promotion is less than expected, the downstream feed demand is less than expected, the market competition is intensified, the project progress is less than expected risk, and the calculation is less than expected risk
