\u3000\u3 Guocheng Mining Co.Ltd(000688) 087 Shandong Intco Recycling Resources Co.Ltd(688087) )
Event: the company announced the issuance of the restricted stock incentive plan for 2022.
It is proposed to encourage 1597600 restricted stocks, and the four-year compound growth rate shall not be less than 17.41%. 1) Number of incentives: 1597600 restricted shares are proposed to be granted, accounting for about 1.2009% of the total share capital of the company. The incentive tool is the first type of restricted stock. 2) Grant price: 28.90 yuan / share; 3) Incentive objects: a total of 427 people, mainly directors, senior executives, core technicians, key management and technical backbones of the company, including director / general manager Jin Zhe, Director / Deputy Manager of Logistics Department Yang Yiqi, chief engineer Li Zhijie, financial director Li Hanming, secretary Zhu Lin, core technicians Wang Qingqing, 50000 shares, 3000 shares, 20000 shares, 30000 shares and 1000 shares, accounting for 7.8% of the total incentive. 4) Performance commitment: the performance evaluation year is four fiscal years from 2022 to 2025. Based on the company’s net profit in 2021, the growth rate of net profit in 20222025 is not less than 15%, 32%, 59% and 90% respectively. It can be concluded that the compound growth rate of net profit in 20222025 is not less than 17.41%. This incentive plan covers a large number of directors, senior executives and core personnel of the company. The comprehensive performance evaluation at the company level and the opening and closing of individual performance will help bind the core interests of the team, improve the company’s long-term incentive mechanism, and clarify the long-term development strategy and growth trend.
Overseas projects are constructed in an orderly manner, and we look forward to the expansion of pet market and the release of back-end deep processing capacity. The company’s overseas pet and Vietnam deep-processing projects have been promoted in an orderly manner. 1) the “50000 T / a PET recycling project” has been gradually debugged as planned, and relevant products have begun to send samples, third-party testing and certification; 2) The infrastructure construction of Vietnam Yingke’s “plastic decorative frame and wire rod project with an annual output of 2.27 million boxes” has been steadily promoted. 3) The company plans to spend 200 million yuan to purchase the subsequent new capacity of Malaysian land reserve. As of March, the company has signed a land sales agreement with the seller. After the overseas projects are put into operation, it will help the company expand the new product market, seize the first mover advantage and further expand the profit scale.
Plastic restriction order carbon neutralization opens the blue ocean market of waste plastics recycling, and the minimum content of recycled materials accounts for the demand. 1) In 2019, the global recycling rate of waste plastics is about 35%, with great room for improvement. 2) The abolition ban drives the reform of the global supply chain and transfers to the Southeast Asian market. 3) The carbon of recycled plastics is reduced by 30% ~ 80% compared with that of primary plastics. 4) The minimum content standard of recycled PET ensures the rigid demand. California of the United States stipulates that the content of recycled plastics in PET bottles will be 15% from 2022. The European Union specifies that the proportion of recycled plastics in PET containers will not be less than 25% by 2025 and 30% by 2030. Major enterprises make voluntary commitments.
The company’s whole industrial chain linkage & layout at home and abroad, technical advantages, cost reduction and efficiency increase, new production capacity put into operation & utilization improvement can be expected. 1) Recycling end: in 2020, the outlets will cover more than 400 in the world, and the cost advantage of overseas plastic recycling is about 20% ~ 60%. Self developed recycling equipment cooperates to establish recycling channels. 2) Regeneration end: the purity of regenerated PS particles is 99%, which can replace some new materials, and the price is 20-50% lower than that of new materials. 3) Utilization end: the profit margin of finished products is more than double that of recycled particles to more than 30%. 4) Recovery equipment, Vietnam recycled products and PET production expansion are about to increase their performance.
Profit forecast and investment rating: the company is a pioneer in recycled plastics, and the project expansion is expected to usher in high growth. We maintain the company’s net profit attributable to the parent company from 2021 to 2023 to be 251 / 390 / 590 million yuan respectively, and EPS to be 1.88/2.93/4.43 yuan respectively, corresponding to 33 / 21 / 14 times PE, maintaining the “buy” rating.
Risk warning: the project is not put into operation as expected, and there are risks of trade policy changes and tariff increases.
