\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 03 Bece Legend Group Co.Ltd(000803) )
Core view:
Event: Bece Legend Group Co.Ltd(000803) released the performance forecast for the first quarter of 2022: the net profit attributable to the parent company is expected to reach 40-45 million yuan in 2022q1, with a year-on-year increase of 296.88% – 346.49% and 313.61% – 365.32% after deduction. EPS is expected to be 0.17-0.19 yuan / share.
In the first quarter, the company’s UCO business volume and price rose simultaneously, and the high boom trend is expected to continue. Benefiting from the increased demand for renewable energy in the “double carbon” era, the company’s kitchen waste recycling products, waste edible oil business scale growth and high prices have improved the company’s profitability. From the demand side, Europe is in short supply because the EU’s requirements for the mixing proportion of biofuels in the transportation field will be further improved; China’s “carbon neutralization” system continues to be implemented. Some provinces and cities will take the lead in piloting the addition and application of biodiesel, and UCO will become a scarce resource. From the supply side, rapeseed oil, soybean oil and palm oil, other raw materials of biomass diesel, have exceeded 12000 yuan / ton, while the UCO price is about 9500 yuan, and the factors supporting the price remain high. According to the company’s announcement, in 22 years, the company will carry out technical transformation of projects in hand, continue to improve the company’s oil extraction rate and further increase its performance.
The scale of food waste treatment increased rapidly. At the end of 2021, the company’s food waste treatment capacity was 1830 tons / day, and the scale of acquisition and entrusted operation was 1700 tons / day. At present, the company has locked in the disposal capacity of 3530 tons / day. According to the company’s plan, it is planned to increase the food waste disposal capacity to 6 Faw Jiefang Group Co.Ltd(000800) 0 tons / day in 2022 and 8 Tcl Technology Group Corporation(000100) 00 tons / day in 2023 through mergers and acquisitions. It is estimated that the company’s food waste disposal capacity will account for 7% – 8% of the country in 23 years. According to our calculation, the company’s food waste treatment capacity will reach at least 4500 tons / day in 2022, corresponding to the waste oil extraction capacity of 4 Shenzhen Zhongjin Lingnan Nonfemet Co.Ltd(000060) 000 tons / year. With the acceleration of expansion, the rapid growth can be expected in the next 2-3 years.
Improving the layout of biomass diesel will become an important profit growth point of the company in the future. In February this year, the company announced that it would establish a joint venture with Binyang fuel chemical to carry out the 400000 T / a transformation of the second-generation biodiesel production project and the cooperation related to the new 300000 t / a first-generation biodiesel processing and production project, becoming a rare listed company with a complete layout of the whole biodiesel industry chain in China. According to the data of the General Administration of customs, the export volume of biodiesel in China reached 1.29 million tons in 2021, and the export price rose rapidly to more than 10000 yuan / ton, an increase of 52% over the beginning of 2021. We estimate that the net profit per ton of the first generation biomass diesel is 1000 yuan, and the net profit per ton of the second generation biomass diesel is significantly higher than that of the first generation. With the gradual implementation of the biodiesel project with a total scale of 700000 T / a (300000 t / A for the first generation and 400000 T / A for the second generation), it will inject strong impetus into the subsequent performance growth of the company.
The heating business maintained steady growth. The subsidiary Xincheng thermal power is a professional urban energy service enterprise, which has the right to operate heating in some areas of Beijing Sub Center. It is one of the four central heating enterprises in Beijing with cogeneration as the heat source. At present, the thermal heating area of the new town is about 7 million square meters and the planned heating area is 30 million square meters. With the subsequent addition of new residential areas, the heating area is expected to increase naturally by about 1 million square meters every year. In the future, the company’s heating business income will maintain a growth rate of about 10% and grow steadily.
Investment suggestion: it is estimated that the net profit attributable to the parent company in 2022, 2023 and 2024 will be 180 / 274 / 408 million yuan respectively, the corresponding EPS will be 0.74/1.13/1.68 yuan / share respectively, and the corresponding PE will be 29.40x/19.26x/12.95x respectively. There is still room for improvement in the current valuation of the company, and the “recommended” rating will be given for the first time.
Risk warning: the risk that the project progress speed is lower than expected; Downside risk of recycled oil price; Risk of insufficient utilization of kitchen waste; Risks of policy changes related to food waste; The risk of intensified industry competition.
