Wangneng Environment Co.Ltd(002034) (002034)
China’s high-quality waste incineration operation enterprise: the company’s main business is waste incineration power generation and comprehensive utilization of solid waste resources. By the end of the third quarter of 2021, the company has an on-hand production capacity of 25200 tons in 10 provinces such as Zhejiang, Hubei, Sichuan, Henan, Anhui and Guangdong, and has completed and put into operation 18 power plants, with a total of 21500 tons of phase 31 projects, The projects under construction and projects under preparation are 1200 tons and 1750 tons respectively. In recent years, the company’s performance has achieved steady growth, and the operating revenue of 2019 / 2020 / 2021q3 has increased by 35.69%, 45% and 106.41% respectively year-on-year; The net profit attributable to the parent company increased by 34.32%, 23.89% and 27.92% respectively year-on-year. The performance growth in 2021 is mainly due to the commissioning of the company’s phase III projects in Qingtian, Luyi and Shantou. The future trial operation and the successive commissioning of projects under construction are expected to further contribute to the performance.
Actively layout new energy lithium battery materials and transform the utilization of renewable resources: the company announced on January 4 that it plans to acquire 60% equity of Zhejiang Lixin New Material Technology Co., Ltd. through its subsidiary Zhejiang wangneng renewable resources utilization Co., Ltd., with a total transaction amount of 94.5 million yuan. Lixin is a new material company using lithium cobaltate battery waste and ternary lithium-ion battery waste for renewable resource utilization. At present, Lixin is building a production line using lithium cobaltate battery waste and ternary lithium-ion battery waste as raw materials to produce cobalt, nickel and lithium salt oxide products. After completion, it is expected to have a production capacity of 3150 tons of cobalt sulfate, 1350 tons of cobalt chloride 1305 tons of cobalt hydroxide, 2561 tons of nickel sulfate and 1458 tons of lithium carbonate are expected to be completed and put into trial operation in the first quarter of this year. With the substantial growth of downstream lithium battery consumption demand, the lithium battery materials business sector is expected to contribute a large performance increment to the company from this year, breaking the growth constraints of the slowdown in the growth of the waste incineration industry. At the same time, the steady waste power generation sector will provide stable cash flow support for new businesses.
The group has a complete industrial chain, and the synergy is expected to appear: Wangneng Environment Co.Ltd(002034) the parent company is meixinda Group Co., Ltd. in recent years, the group has formed a complete industrial chain with environmental protection solid waste as the main body through continuous transformation and expansion, including waste power generation, kitchen disposal, agricultural waste disposal, hazardous waste disposal, sanitation and cogeneration, Waste power generation and kitchen disposal are both on the platform of listed companies. According to the company’s announcement and the group’s official website, the current treatment scale has reached 21500 tons and 2555 tons respectively. In terms of agricultural waste disposal, baiomas, a subsidiary of the group, is a leading treatment enterprise of dead pigs in China. According to the disclosure on the group’s official website, by the end of 2020, it had treated 8.572 million dead pigs, built 42 operation projects and had an annual harmless treatment capacity of 164000 tons. The company in the hazardous waste disposal sector mainly takes the collaborative disposal of cement kilns as the starting point, and has built hazardous waste treatment centers in Zhejiang, Anhui, Sichuan and other places. At the same time, at the middle and front end of the industrial chain, Zhihui environment, a subsidiary of the group, mainly arranges five business segments: environmental sanitation integration, solid waste classification and recycling, environmental protection equipment manufacturing, ecological restoration and solid and hazardous waste reverse logistics, and fully cooperates with downstream waste incineration, kitchen and other business segments. In the future, with the continuous expansion of the group’s industrial layout, the synergy is expected to be further highlighted.
Investment suggestion: we expect the revenue growth rate of the company from 2021 to 2023 to be 30.2%, 24.3% and 16.0% respectively, and the net profit growth rate to be 29.4%, 26.6% and 16.6% respectively, with outstanding growth; The investment rating of Buy-A is given, and the six-month target price is 24.0 yuan.
Risk tip: the project commissioning progress is less than expected, the price of lithium carbonate decreases, and the price of waste power generation decreases.
