Jingjin equipment ( Jingjin Environmental Protection Co.Ltd(603279) )
Event: the company disclosed the annual report of 2021. The annual revenue was 4.651 billion, yoy + 39.70%, and the net profit attributable to the parent company was 647 million, yoy + 25.71%; Q4 achieved a revenue of 1.316 billion, yoy + 26.77%, and a net profit attributable to the parent company of 197 million, yoy-2.64%. On March 10, the company disclosed the operating data from January to February. From January to February 2022, the company achieved an operating revenue of about 709 million yuan, a year-on-year increase of about 42%.
In 2021, the company’s products were widely used in new energy, new materials, gravel and other fields, driving the sustainable development of the company’s performance. The growth rate of net profit attributable to the parent company in 2021 was lower than that of revenue, mainly because the newly accrued equity incentive fee in that year was about 72 million yuan. The downstream sales of the company in 2021 have a good performance: 1) new energy and new materials: the revenue is 480 million yuan (YoY + 82.1%). At present, the company’s filter press has been widely used in the filtration, washing and wastewater treatment in the process of lithium salt extraction (lithium extraction from spodumene, lithium extraction from mica and lithium extraction from Salt Lake), positive electrode material, graphite negative electrode, PVDF resin material, electrolytic solution material, lithium battery recovery and so on; 2) Sand and gravel: the income is 400 million yuan (YoY + 71.1%). With the increasing production of machine-made sand and the continuous increase of the implementation of environmental protection policies, the demand for separating the sewage after sand washing by filter press is constantly released, which promotes the high application of filter press in the field of sand and gravel; 3) Environmental protection: with an income of 1.65 billion yuan (YoY + 33.3%), the state has paid more attention to sludge treatment and disposal, and the sludge disposal rate has increased. However, at present, the average sludge disposal rate in China’s cities and towns still lags behind the sewage treatment rate, “heavy water and light sludge” has gradually changed to “pay equal attention to both mud and water”, and the urban sludge disposal market will continue to grow during the 14th Five Year Plan period; 4) Chemical industry: with a revenue of 650 million yuan (YoY + 31.2%), the filter press has many application scenarios in the chemical industry. In addition to the traditional chlor alkali, inorganic salt, rayon viscose, glycerol and white carbon black, new fields include dyes, pigments, silicic acid, sodium sulfate, titanium dioxide, silicon carbide and nickel cobalt chemical industry. The high increase in 2021 is mainly related to the high boom in the upward cycle of chemical product prices; 5) Minerals and processing: the income is 1.15 billion yuan (YoY + 38.5%). The filter press is mainly used in the fields of non-ferrous metals, metal tailings, clean coal, tail coal and non-metallic mines, which may be related to the increase in the outlook during the upward cycle of prices in the non-ferrous industry; 6) Biomedicine: the revenue is 320 million yuan (YoY + 17.5%), and the filter press is mainly used in pharmaceutical intermediates, APIs, Chinese patent medicines, fermentation broth and enzyme preparations in the field of biomedicine.
It is expected that the company will still maintain rapid growth in 2022: 1) environmental protection will maintain steady growth, and the harmless treatment rate of urban sludge will continue to improve. At present, the proportion of pressure filtration dehydration is still low, and there is considerable room for expansion; 2) Since 2022, the cycle industry has experienced a high boom, which has supported the sales of chemical, mineral and processing filter presses of the company; 3) The permeability of filter press in manufactured sand is still low and in the process of rapid improvement; 4) New energy and new materials will still benefit from the high boom in the upper reaches of electric vehicles. 5) The company announced that its “filter press project with an annual output of 1000 units” will reach the expected usable state in March 2022, and the new capacity will be released.
Investment suggestion: considering the good development momentum of various businesses of the company, it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 860 / 10.5 / 1.26 billion respectively, and the corresponding PE will be 19x / 16x / 13X respectively, maintaining the “recommended” rating.
Risk tip: there is an uncertain risk of demand under the disturbance of the epidemic, and the release progress of new production capacity is lower than the expected risk.
