\u3000\u3 Guocheng Mining Co.Ltd(000688) 196 Longyan Zhuoyue New Energy Co.Ltd(688196) )
Event: the company released the annual report of 2021, which achieved a revenue of 3.083 billion yuan (year-on-year + 92.91%) and a net profit attributable to the parent company of 345 million yuan (year-on-year + 42.33%). In the first quarter of 2022, the net profit attributable to the parent company is expected to be about 947173 million yuan (year-on-year + 65.21%).
The volume and price of biodiesel increased simultaneously, the gross profit margin of products extending the industrial chain increased, and the comprehensive profitability was strong: the performance growth of the company in 2021 was mainly due to the new 100000 ton biodiesel project in Meishan plant, which was put into operation on schedule and reached production rapidly. The production and sales volume of biodiesel increased significantly, and the sales price also increased steadily. The net profit of 2021q4 is 145 million yuan, a record high in a single quarter, and the net profit per ton of biodiesel is expected to exceed 1000 yuan. According to the announcement, in 2021, the company produced 358000 tons of biodiesel and sold 330000 tons, with a year-on-year increase of 54.65% and 44.70% respectively. In 2021, the company’s average sales price of biodiesel was 8270 yuan / ton, an increase of 32.88% year-on-year. However, the continuous appreciation of RMB led to the price increase of export biodiesel denominated in RMB lower than that of Chinese raw materials. At the same time, the rise of biodiesel price led to the increase of tax and the decrease of biodiesel gross profit rate by 7.44%; The gross profit margin of industrial glycerol and bio ester plasticizer in 2021 was 77.40% and 19.76% respectively, with a year-on-year increase of 66.97 PCT and 5.78 PCT respectively. Therefore, the comprehensive profitability of biodiesel production system has been effectively stabilized.
Under the global carbon emission reduction target, the prosperity of biodiesel continues to improve: in July 2021, the latest proposal of the European Commission proposed that the proportion of renewable fuels in the transportation field in the EU should increase from 14% to 26% by 2030, the lower limit target should be implemented for PartA’s advanced biofuel products, and the upper limit target should be maintained for PartB’s products. At the same time, the use of high-risk iluc biofuels should be phased out by 2030, such as palm oil-based biofuels. Since the end of 2020, the trading price of EU emission quota (EUA) has risen rapidly, and the trading volume of certified emission reduction has been reduced to a low level, which has further driven the demand for “zero carbon fuel” biodiesel. Europe is the largest consumer of biodiesel. According to the OECD, the supply and demand gap of biodiesel in Europe is expected to exceed 3 million tons in the future. According to the General Administration of customs, China’s export volume of biodiesel reached 1.29 million tons in 2021, and the export price rose rapidly to more than 10000 yuan / ton, up 52% compared with the beginning of 2021. The trend of supply exceeding demand is obvious.
The capacity construction of biodiesel, bio based materials and HVO has been carried out in an orderly manner, with clear strategic objectives: according to the announcement, the company’s annual output of 100000 tons of biodiesel construction project will reach the production capacity as scheduled in 2021, and the construction of the second production line with an annual output of 100000 tons of biodiesel will be 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. According to the announcement, in 2021, the company’s biodiesel production capacity will reach 400000 tons and the production capacity of bio based materials will reach 90000 tons. It is planned to complete the industrial layout with an annual production capacity of 750000 tons of biodiesel and 250000 tons of bio based materials products in three to five years, so as to become a “biomass energy integration” enterprise.
Investment suggestion: it is estimated that the net profit of the company from 2022 to 2024 will be 410 million yuan, 550 million yuan and 720 million yuan respectively, corresponding to pe19, 14 and 11 times, maintaining the Buy-A rating.
Risk warning: raw material price fluctuation, production capacity construction progress is less than expected, etc.
