Beijing Geoenviron Engineering & Technology Inc(603588) (603588)
Key investment points
Event: the company announced that it plans to acquire 51% equity of Jinchang xinshengyuan metal materials Co., Ltd. (xinshengyuan) and 51% equity of Jinchang sine wave Environmental Protection Technology Co., Ltd. (sine wave), with a total investment of 91.34 million yuan.
Layout nickel deep recycling, cut into new energy materials. The company plans to invest 50.54 million yuan in xinshengyuan and acquire 51% of its equity, and 40.8 million yuan in sine wave and acquire 51% of its equity, with a total amount of 91.34 million yuan. Xinshengyuan products are mainly high-quality nickel oxide and electronic nickel oxide, and sine wave products are mainly battery grade nickel cobalt sulfate solution. 1) Cooperate with the nickel containing hazardous waste plate to realize the deep recycling of nickel. Xinshengyuan and sine wave are located in Jinchang, Gansu Province, The company has existing hazardous waste recycling projects, high energy medium color (put into operation 77200 T / a) and Jinchang project (100000 t / A under construction) is located in Jinchang, Gansu Province, and mainly disposes of nickel containing hazardous wastes. The acquisition project will extend the existing nickel containing hazardous waste disposal industrial chain, with obvious synergistic thickening. 2) there is a wide demand in the downstream of nickel resource products. Nickel oxide can be used as a raw material for the production of colorants and magnetic materials, as well as materials for the manufacture of nickel salts, nickel catalysts and secondary batteries. Battery grade nickel sulfate is three yuan As the raw material of battery precursor, the company has cut into the new energy material industry chain.
Xinshengyuan: 1350t / a high-quality nickel oxide has been put into operation, and 1350t / a electronic nickel oxide is expected to be put into operation in 2022q2. Xinshengyuan has two production lines with an annual output of 2700 tons of ultra-fine metals and oxides. A 1350t / a high-quality nickel oxide production line has been put into operation, and a 1350t / a electronic nickel oxide production line has been put into operation. The company announced that it is expected to be put into operation in 2022q2. The project has not been profitable. Xinshengyuan is Jinchang new material engineering technology research center. Its business field has accumulated relevant patented technology and proprietary technology, and has technical advantages.
Sine wave: 26000 tons / year of battery grade nickel cobalt sulfate solution. The announcement is expected to be put into operation in 2022q1. Sine wave company is building a production line for preparing nickel cobalt sulfate solution from waste metal products. After the completion of the project, the annual production capacity of 6000 tons of waste nickel metal raw materials will be formed, The annual output of battery grade nickel cobalt sulfate solution is 26000 tons (22000 tons / year of nickel sulfate and 4000 tons / year of cobalt sulfate). The company announced that it is expected to be put into operation in 2022q1, and the project has not been profitable. The production capacity is about to be put into operation, and the release of performance is worth looking forward to.
Profit forecast and investment rating: the scale of the company’s resource business has expanded rapidly. As of December 31, 2020, the approved scale of hazardous wastes in hand is 53599 tons / year, The projects under Construction announced include Chongqing Yaohui (100000 t / a), Guizhou project phase I (350000 T / a), Jiangxi Xinke (310000 T / a), Jinchang project (100000 t / a) and jiatianhe (30000 T / a medical waste plastic + 40000 t / a medical waste glass) a total of 930000 T / A. the front-end production capacity is expanded and the deep resource distribution of copper, lead and nickel is gradually realized, and the profitability is expected to be improved. We maintain the net profit attributable to the parent company of RMB 770 / 10.0 / 1.31 billion from 2021 to 2023. Considering the impact of this non-public offering on the total share capital of the company, the corresponding EPS from 2021 to 2023 is 0.73/0.73 respectively 78 / 1.02 yuan. The current market value corresponds to pe23 / 22 / 17 times from 2021 to 2023. The company is expected to replicate Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) fine management ability, create a leader in hazardous waste recycling, increase the proportion of operation and maintain the “buy” rating.
Risk tip: the construction of hazardous waste production capacity is less than expected, the utilization rate of production capacity is less than expected, and the competition is intensified
