Hazardous waste recycling metals have both environmental protection and carbon reduction attributes and economic value, and have development prospects. The carbon reduction effect of recycled metals of hazardous waste recycling products is significant, which is consistent with the background of “carbon neutralization”: according to the statistics of Nonferrous Metals Association and recycled metals branch, the production of 1 ton of recycled copper saves 73% of energy consumption, 99% of water consumption and 380 tons of solid waste 0.14t SO2, 3.5t CO2 Hazardous waste recycling enjoys a number of preferential tax policies, including value-added tax and income tax. For example, 70% of the value-added tax on the disposal of labor income and 30% of the tax on the sale of renewable resource products. Since 2021, the price of back-end metals has been rising continuously, increasing the performance of hazardous waste recycling enterprises: as of March 13, 2022, the prices of nickel, cobalt, tin, antimony, copper and other metals have increased by 107.4%, 106.9%, 144.4%, 103.8% and 47.0% compared with the beginning of 2020.
Hazardous waste recycling has developed rapidly, showing a small scattered competition pattern
The hazardous waste industry is characterized by fast growth of qualification, low capacity utilization and small monomer scale: 1) the growth rate of approved qualification of hazardous waste in China remained above 20% from 2015 to 2019; 2) In 2019, the actual utilization and disposal capacity utilization rate was only 27.6%; 3) The average scale of a single business license is only 30700 tons / year.
The hazardous waste recycling capacity also presents a small and scattered competition pattern: according to our statistics, as of July 2021, China’s hazardous waste approval qualification was 153 million tons, of which the recycling capacity was 93 million tons, accounting for 60.63%; Among the resource-based production capacity, the average scale of a single operation license is 42900 tons / year, and enterprises with an annual processing capacity of less than 20000 tons account for 51.91%. The market share of industry leading cities is less than 5%, and the market share of Zhefu Holding Group Co.Ltd(002266) , Dongjiang Environmental Company Limited(002672) , Feinan resources, Beijing Geoenviron Engineering & Technology Inc(603588) metal recycling capacity is 3.44%, 1.45%, 1.00% and 0.93% respectively.
The improvement of environmental protection standards and the reduction of administrative barriers are expected to promote the resource concentration of hazardous wastes, improve environmental protection standards, and accelerate the clearance of low-end production capacity in the industry: in November 2020, the pollution control standard for hazardous waste incineration was released, which lowered the emission limits of pollutants such as particulate matter and nitrogen oxides, and increased relevant requirements, which will help to eliminate backward small-scale production capacity.
Simplify the approval process of inter provincial transfer, which is conducive to the expansion of enterprises in different places and improve the concentration: the management measures for hazardous waste transfer implemented in 2022 puts forward the “white list” cooperation mechanism for inter provincial transfer of waste. At present, Anhui, Sichuan and Chongqing have established cooperation mechanisms and promulgated the “white list” for inter provincial transfer of hazardous waste. Further expansion of the company’s production capacity in Sichuan and Hunan: .
Mergers and acquisitions occur frequently in the industry, confirming the increasing trend of concentration: since the end of 2019, the acquisition amount of Listed Companies in the industry has totaled 20.9 billion yuan, and the acquisition scale has totaled 3.44 million tons / year, confirming the increasing trend of concentration.
Hazardous waste recycling enterprises: Beijing Geoenviron Engineering & Technology Inc(603588) , Zhefu Holding Group Co.Ltd(002266)
The market space of hazardous waste recycling is broad, and the share of leading cities is likely to increase: stricter environmental protection supervision and carbon neutralization promote the development of waste metal recycling industry, and there is a long-term disposal gap in industrial capacity. The industry presents the characteristics of small dispersion, the improvement of standards and the reduction of administrative barriers promote the upward concentration of the industry, and the market share of leading companies with technical and management advantages is expected to increase.
According to the performance forecast, the average growth rate of Zhefu Holding Group Co.Ltd(002266) and Beijing Geoenviron Engineering & Technology Inc(603588) net profit attributable to parent company in 2021 is 70.71% and 38.17% respectively. The performance in 2021 is bright. As of December 31, 2021, Beijing Geoenviron Engineering & Technology Inc(603588) , Zhefu Holding Group Co.Ltd(002266) the capacity under construction / put into operation is 2.31 and 0.55 respectively, with high growth certainty.
Risk tips
1. Risks caused by metal price fluctuations;
2. The project was put into operation less than expected.
