\u3000\u3 Guocheng Mining Co.Ltd(000688) 087 Shandong Intco Recycling Resources Co.Ltd(688087) )
The layout of the whole industrial chain is scarce, and the performance is growing steadily. With Intco Medical Technology Co.Ltd(300677) the same actual controller, the company is committed to the whole industrial chain business of "recycling recycling recycling recycling" of renewable plastics. It has the only complete industrial chain of PS plastic recycling in the industry. All links have strong synergy and can effectively resist the risk of periodic fluctuation of recycled particle price. From 2017 to 2021, the CAGR of revenue and net profit deducted from non parent company reached 18.3% and 40.5% respectively (according to the data of performance express in 2021), the roe was basically stable at more than 15%, and the performance increased steadily.
The advantages of channel, technology and scale create a high moat. The production of the company has scale effect, the core self-developed technology builds barriers, the recycling network covers more than 50 countries, and has more than 400 recycling points. The overseas recycling cost advantage is obvious (the average price difference of plastics purchased at home and abroad is in the range of 10102610 yuan / ton, and the cost advantage is about 20% - 40%), and the price advantage of recycled plastics is about 40% compared with that of primary plastics.
Expand other products horizontally, reserve sufficient capacity and improve performance flexibility. The company will horizontally expand pet, PE, PP, HDPE and other recycled plastic products and establish a diversified product system. At present, the 50000 T / a PET recycling project in Malaysia is under commissioning, and the high-quality regeneration project of 100000 t / a multi category plastic bottles in Anhui is under preparation. In addition, the production of PS and pet will be expanded to the target capacity of 300000 t / a (about 97000 T / A at present) and 1 million T / a (50000 T / a new capacity is under commissioning), and the future capacity release will continue to increase the company's profits.
Benefiting from policy dividends, the industry has large space and high prosperity. In 2020, the global plastic output was 370 million tons, and the CAGR from 2010 to 2020 was 3.2%, with a stable growth every year. At present, the global recycling rate of renewable plastics is only 14% - 18%, and there is still much room for improvement. National policies frequently promote the improvement of recycling rate. The European Union has made it clear that the proportion of recycled plastics in PET containers will be ≥ 25% by 2025 and ≥ 30% by 2030. The United States, Britain, Japan, South Korea and other countries and regions have also issued recycling rate target policies, More than 400 enterprises and government organizations have signed the global commitment of the new plastic economy, covering 20% of the output value of the global plastic packaging industry. By 2025, the total demand of participants for recycled components in packaging will exceed 5 million tons. In addition, recycled plastics have the attributes of circular economy and low-carbon. If recycled raw materials are completely used, compared with the linear carbon approach, it can reduce carbon emissions by 30 ~ 64%, and help the country realize the dual carbon strategy.
Investment advice. As the leader in the field of plastic recycling, the company has the advantages of scale, technology and channel, and benefits from the policy dividends of various countries. The industry has a large space. In the past two years, the company's production capacity has been released intensively and entered an accelerated growth period. Under the background of strong promotion of double carbon and recycling, recycled plastics have the characteristics of reducing carbon by 30 ~ 64% compared with primary plastics, and its future development is worth looking forward to. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 240 / 3.3 / 460 million yuan and EPS will be 1.79/2.49/3.42 yuan respectively. The corresponding PE is 39.7x / 28.5x / 20.8x respectively, which is covered for the first time and given a "buy" rating.
Risk warning: the risk of market growth slowdown caused by policy changes; Risk of raw material supply and product sales of new projects; Foreign trade, tariff policy and exchange rate fluctuation risk; Risk of failure in new product development and production capacity launch less than expected; Risks of intensified competition in the plastic recycling industry in the future
