\u3000\u3000 Road Environment Technology Co.Ltd(688156) (688156)
Event: the company released the performance express of 2021. In 2021, the company realized an operating revenue of 382 million yuan, a year-on-year increase of 52.54%; The net profit attributable to the parent company was 77 million yuan, a year-on-year increase of 61.24%; The net profit deducted from non parent company was 67 million yuan, with a year-on-year increase of 77.74%.
Comments:
Baijiu distiller’s grains fermented by biological fermented feed were strong and their performance increased significantly. In 2021, with the feed industry “ban”, the “anti reduction and anti restriction” policy of the livestock industry, and the demand for environmental protection of distillers grains continued to grow, the number of fermented feed products of Baijiu Baijiu was in short supply, and the output and sales volume increased significantly. The sales of distilled grains fermentation feed increased significantly, and the factors such as soybean meal and corn increased Shenzhen Agricultural Products Group Co.Ltd(000061) prices. The revenue of industrial residue recycling business increased significantly. In addition, the company’s River and lake sludge, engineering mud and municipal sludge treatment business grew steadily, contributing to the basic performance of the company.
The resource production capacity of distiller’s grains continued to grow, ensuring the high growth of the company’s performance. According to the plan of capacity building announced by the company, 2022-2023 years will be added to two Baijiu biological fermentation feed factories in Jinsha and Zunyi Hui Chuan, with capacity of 15 and 80 thousand tons respectively. According to Baijiu Baijiu distiller’s capacity of resource production construction rhythm, we pre 2022/2023/2024 years of Baijiu grain resource capacity is 11/22/30 million tons / year, distiller’s grains fermentation feed production capacity will grow rapidly. Baijiu fermented feed products have two advantages: lower cost and higher nutritional value. The company has strong market competitiveness and the current production capacity is in short supply. The new capacity digestion will be ensured in the future, and the production capacity will drive the company’s performance to increase.
The company’s first advantage is obvious, and the fermented feed business of Baijiu is growing well. Since 2014, the company has transformed and developed the organic residue recycling business. After 7-8 years of cultivation, the business has gradually developed and matured. There is a broad market space for the recycling of organic residue, and there is a large space for the improvement of permeability in the future. With its first mover advantages in technology, upstream distiller’s grains resource supply and downstream market customer expansion, the company’s market share is expected to continue to increase in the future, and its long-term performance is expected to maintain a high growth trend.
The traditional river lake sludge and engineering mud treatment business is expected to maintain steady growth and help the company’s business transformation. With the promotion of policies such as the “ten water rules” and the great protection of the Yangtze River, the demand for river and lake sludge and engineering mud treatment will continue to release. The company has strong technical advantages in the field of river sludge and engineering mud treatment, and its future business revenue and performance are expected to maintain growth momentum, helping the development of Baijiu fermented feed business.
Maintain the “buy” rating: the company has been deeply cultivated in the field of high water content waste treatment for many years and has a mature technical system. At the same time, it has benefited from the national pollution control policy, feed “Prohibition” and aquaculture “reduction and restriction” policies. The sludge treatment market is stable and gradually enters the blue ocean of waste residue treatment. As a listed company of waste residue recycling in the current market, The first advantage is stronger, and Baijiu fermentation fermentation feed capacity will be released in the future, and the performance is expected to maintain a rapid growth trend. It is estimated that the operating revenue of the company from 2021 to 2023 will be 382, 533 and 737 million yuan respectively (350, 533 and 737 million yuan respectively before adjustment), with a year-on-year increase of 52.54%, 39.68% and 38.34% respectively, and the net profit attributable to the parent company will be 77, 120 and 181 million yuan respectively (69, 120 and 181 million yuan respectively before adjustment), with a year-on-year increase of 61.24%, 57.19% and 50.84% respectively; The corresponding EPS were 0.83, 1.31 and 1.97, and PE were 27.94, 17.78 and 11.78 times, respectively.
Risk warning: the risk that the policy promotion is not as expected, the market competition is intensified, the project promotion progress is not as expected, and the information used in the research report is not updated in time.
