\u3000\u3 Guocheng Mining Co.Ltd(000688) 196 Longyan Zhuoyue New Energy Co.Ltd(688196) )
Core view
The revenue and profit of 2021q4 reached a record high, and the performance of 2022q1 increased significantly year-on-year. In 2021, the annual revenue was 3.083 billion yuan (+ 92.9%), and the net profit attributable to the parent company was 345 million yuan (+ 42.3%), of which the single quarter revenue in the fourth quarter was 1.102 billion yuan (year-on-year + 178.7%, month on month + 28.2%), and the net profit attributable to the parent company was 145 million yuan (year-on-year + 196.2%, month on month + 54.2%). The company released the performance forecast for the first quarter of 2022. It is expected to realize the net profit attributable to the parent company of 95 million yuan, a year-on-year increase of 65.2%, deducting the net profit not attributable to the parent company of 95 million yuan, a year-on-year increase of 75.4%, and the performance is in line with the expectation.
The new production capacity of biodiesel was put into operation as scheduled, and the volume and price of raw firewood rose all year round. The 100000 t / a biodiesel in Meishan plant of the company was put into operation in the first quarter of 21 years and reached production rapidly. The existing capacity is 400000 T / A, and the annual revenue is 2.73 billion yuan, a year-on-year increase of 101.7%; The output reached 358000 tons, a year-on-year increase of 54.7%; The sales volume was 331000 tons, with a year-on-year increase of 44.7%; The average sales price was 8273 yuan / ton, a year-on-year increase of 39.4%. The company’s production capacity of bio based materials is 90000 tons / year, with an annual revenue of 330 million yuan, a year-on-year increase of 40.6%, a gross profit margin of 33.3% and a year-on-year increase of 19.5pp, of which the gross profit margin of industrial glycerol increased by 67.0pp to 77.4%.
The export demand of biodiesel is strong, and the industry is optimistic about the high prosperity of the whole year. In 2021, China’s biodiesel production was about 1.5 million tons, with a year-on-year increase of 16.8%; Exports were about 1.3 million tons, a year-on-year increase of 39.7%; The annual average export price rose from US $1060 / ton to US $1391 / ton, a year-on-year increase of 31.2%. From January to February 2022, the export of biodiesel was 226000 tons, with a year-on-year increase of 11.9%. The average export price was 1650 US dollars / ton, with a year-on-year increase of 55.2%. The EU has long-term policy support and encouragement for biodiesel and other biofuels produced from waste oil resources. We are optimistic about the long-term growth space of waste oil based biodiesel.
The company is the leader of biodiesel in China, and its biodiesel production capacity will double in the next three years. The company’s new 100000 ton production line was started on December 1, 2021. At present, all workshops have been capped, and the project construction is expected to be completed in October 2022. The preliminary work of the project with an annual output of 50000 tons of natural fatty alcohol and the project with an annual output of 100000 tons of hydrocarbon based biodiesel has been carried out in an orderly manner, and the construction is expected to start in the second half of 2022. The company plans to complete the scale of 750000 tons / year of biodiesel and 250000 tons / year of bio based materials in 3 to 5 years.
Risk warning: the risk of sharp fluctuations in the price of raw materials; The risk that the product demand is less than expected; The risk that the progress of the project under construction is less than expected.
Investment suggestion: raise the profit forecast for 2022 and maintain the “buy” rating.
Raise the profit forecast for 2022 to 481 million yuan (original value 455 million yuan), maintain 2023 and add a new profit forecast for 2024. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 481 / 555 / 625 million yuan, with a year-on-year growth rate of 39.4 / 15.6 / 12.5%; Diluted EPS = 4.01/4.63/5.21 yuan, and the current share price corresponds to PE = 16 / 14 / 12x. The company is a leader in China’s biodiesel industry. Overseas biodiesel is in short supply. It is optimistic about the scenic spots in the biodiesel industry and maintains the “buy” rating.
