Jingjin Environmental Protection Co.Ltd(603279) (603279)
Core view: Jingjin Environmental Protection Co.Ltd(603279) is the leader of filter press in China, with a market share of more than 40%, and its revenue scale and profitability are significantly ahead of its competitors. The revenue / net profit CAGR in 2013-2020 is 7% / 24%, and the revenue / net profit in 2020 is 3.33/510 billion yuan. The company has expanded from traditional industries such as environmental protection and mining to emerging growth fields such as lithium battery and sandstone. In 2021, H1 new business revenue accounts for 18%. Lithium battery and sandstone are expected to become the main growth point of the company in the next three years.
Lithium battery and gravel bring new growth points to the filter press industry. The market space of filter press in China was 10 billion in 21 years, with a compound growth rate of 10.1% from 2013 to 2021. The industry driving factors bring the demand for "sewage sludge" treatment for environmental protection policies and the expansion of "purification process" in the industrial field. In 2020, the application of "sand and gravel" and "new energy" will appear, bringing new growth points to the filter press. ① Policy overweight promotes the rapid growth of "gravel wastewater" industry. Based on the estimation of 14 billion tons of wet manufactured sand in China, the transformation space for the stock of complete equipment of filter press is 17.5 billion yuan, and the penetration rate is less than 15%. The policy will be overweight from 2019 to 2020, and the industry demand will explode rapidly. ② Expansion of filter press in lithium battery industry. The filter press gradually replaces the centrifuge in the lithium battery field and is applied to the filtration, washing and wastewater treatment in the processes of lithium mining, salt lake lithium extraction, positive and negative electrodes, PVDF and battery recovery. The capital expenditure of 1GW exceeds 10 million yuan, benefiting from the expansion of lithium battery production, and the industry maintains a high business cycle.
The growth of the company comes from two aspects: 1) the expansion of applications in emerging industries; In 2021h1, the company's revenue from lithium battery and gravel industry accounts for 18%, cutting into all links from upstream lithium mine production to battery recovery. The market share of lithium battery field reaches 50%, and will grow rapidly with the expansion of power battery production in the future. The company has a market share of 20% - 30% in the sand and gravel industry. It is a small sand factory. Based on cost considerations, it is equipped with low-end filter press or idle. The company's high-end filter press and complete sets of equipment can provide more incremental value for large customers and fully benefit from the improvement of environmental protection inspectors and sand mining plant concentration. 2) From single equipment manufacturing to complete equipment. The value of supporting equipment is twice that of filter press. Relying on the advantages of filter press products, the company occupies the entrance of system integration, expands supporting equipment such as low-temperature filter biscuit chemical machine, mixer and dosing machine, and grasps the core technology of the whole industry chain from raw material processing to final products, which is expected to become a new growth point. Investment suggestion: we expect the company's revenue growth rate to be 35.6% / 28.3% / 27.4%, net profit growth rate to be 23.8% / 43.0% / 28.3%, EPS to be 1.54/2.20/2.82 yuan and PE to be 29x / 20x / 16x respectively from 2021 to 2023, maintaining the investment rating of buy-a.
Risk tip: the expansion of power battery production is lower than expected, the macro-economy is depressed, the environmental protection policy of gravel industry is lower than expected, and the upgrading and transformation of sewage treatment plant is lower than expected.
