\u3000\u3 Guocheng Mining Co.Ltd(000688) 196 Longyan Zhuoyue New Energy Co.Ltd(688196) )
Event: the company released its annual report for 2021. In 2021, the company achieved an operating revenue of 3.083 billion yuan, a year-on-year increase of 92.91%, a net profit attributable to the parent of 345 million yuan, a year-on-year increase of 42.33%, and a net profit attributable to the parent of 319 million yuan after deduction, a year-on-year increase of 59.40%. The company also announced the performance forecast for the first quarter of 2022. It is estimated that the net profit attributable to the parent company in the first quarter is about 947173 million yuan, with a year-on-year increase of about 65.21%, and the net profit after deduction is 953598 million yuan, with a year-on-year increase of about 75.35%. The company’s profit distribution plan is to distribute a cash dividend of 11.5 yuan for every 10 shares.
The simultaneous rise in the volume and price of biodiesel promoted the growth of performance. The company is a leading enterprise in the field of biodiesel in China, with the largest scale and export volume in China. In 2021, driven by the commissioning of a new 100000 ton biodiesel project in Meishan plant, the company’s annual biodiesel sales increased significantly. At the same time, driven by the price of crude oil and other bulk commodities, the price of the company’s products also increased significantly. 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 terms of sales price, the average sales price of biodiesel of the company in 2021 was 8270 yuan / ton, an increase of 32.88% year-on-year. The increase in the volume and price of biodiesel has promoted the growth of the company’s annual performance. The company’s annual biodiesel revenue was 2.73 billion yuan, a year-on-year increase of 101.66%, accounting for 88.52% of the revenue, an increase of 3.84 percentage points over 2020. In addition, the company’s revenue from bio based materials was 333 million yuan, with a year-on-year increase of 40.56%, including 189 million yuan from biological plasticizer, 86 million yuan from biological glycerol and 58 million yuan from alkyd resin, with a year-on-year increase of 11.5%, 112.26% and 114.97% respectively. Driven by the two businesses, the company achieved an annual operating revenue of 3.083 billion yuan, a year-on-year increase of 92.91%, and a net profit attributable to the parent company of 345 million yuan, a year-on-year increase of 42.33%
From the perspective of profitability, the company is facing the adverse impact of the rise in raw material prices and the appreciation of RMB in 2021. As the company’s products are mainly exported, the appreciation of RMB leads to the price increase of exported biodiesel priced in RMB is lower than that of Chinese raw materials. At the same time, the rise of biodiesel price leads to the increase of tax, which has an impact on the company’s product profits. In the whole year, the gross profit margin of biodiesel of the company was 7.78%, a year-on-year decrease of 7.44 percentage points. Through continuous technological transformation, the company improves the export rate of high gross profit products and ensures the stable net profit level of single ton biodiesel. In addition, the gross profit margins of the company’s biological plasticizer and industrial glycerol were 19.76% and 77.4% respectively, with a year-on-year increase of 5.78 and 66.97 percentage points, effectively stabilizing the comprehensive profitability of the biodiesel production system.
The trend of global carbon emission reduction promotes the broad prospect of biodiesel. Biodiesel is a typical “green energy”, which has the characteristics of extensive and renewable raw materials, good combustion performance and remarkable environmental protection effect. In 2021, the revised European Renewable Energy directive (redii) was officially implemented, which put forward the objectives and plans for the development of renewable energy from 2021 to 2030. The EU will further optimize the structure of biofuels and encourage the production of advanced biofuels from oil raw materials with comprehensive utilization of waste resources. In July 2021, the latest proposal of the European Commission proposed that the EU increase its greenhouse gas emission reduction target to 55% by 2030, achieve carbon neutrality by 2050, increase the overall share of renewable energy in total final energy consumption from 32% to 40%, and increase the share of renewable fuels in transportation from 14% to 26%. In terms of specific rules, waste oil methyl ester will become the main force to replace palm oil methyl ester in the future, and the demand is expected to increase significantly. The huge demand in Europe will bring a broad market for the company’s biodiesel,
At present, China has not mandated the addition of biodiesel to diesel, but Shanghai has begun to promote biodiesel on buses and sanitation vehicles and sell it to social vehicles. In October 2021, the “key tasks” in the 2030 carbon peak action plan of the State Council proposed to vigorously promote the replacement of traditional fuel with advanced biological liquid fuel and sustainable aviation fuel, and actively expand the application of new and clean energy such as advanced biological liquid fuel in the field of transportation. With the implementation of national and local supporting measures, it is expected to bring huge development space to China’s biodiesel industry.
The new projects are put into operation in an orderly manner, and the future performance growth is guaranteed. In the future, the company will have many planned projects and orderly expansion of production capacity, which will bring sufficient power to the subsequent performance growth. In 2021, the company will produce 100000 tons of biodiesel, and the construction project will reach the production capacity as scheduled. The construction of the second production line with an annual output of 100000 tons of biodiesel was started on December 1. At present, all workshops have been capped, and the project construction is expected to be completed in October 2022. In addition, 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.
A series of new projects of the company are expected to promote the healthy, sustainable and stable development of the company. With the gradual operation of the projects in hand, the company’s annual production capacity of biodiesel will reach 750000 tons and the annual production capacity of bio based materials will reach 200000 tons, which is nearly double the existing production capacity, providing guarantee for the company’s future performance growth.
Profit forecast and investment rating: the company’s EPS is expected to be 3.52 yuan and 4.34 yuan in 2022 and 2023. Calculated by the closing price of 67.59 yuan on March 30, PE is 19.21 times and 15.59 times respectively. Give the company an investment rating of “overweight”.
Risk tip: the price of raw materials has risen sharply, and the overseas demand is less than expected
