\u3000\u3 Guocheng Mining Co.Ltd(000688) 087 Shandong Intco Recycling Resources Co.Ltd(688087) )
Event: Shandong Intco Recycling Resources Co.Ltd(688087) released the annual report of 2021: the operating revenue in 2021 was 1.99 billion yuan, with a year-on-year increase of 17.14%; The net profit attributable to the parent company was 240 million yuan, a year-on-year increase of 10.35%; After deducting non profits, the net profit attributable to the parent company was 224 million yuan, a year-on-year increase of 79.11%. Diluted EPS is 2.11 yuan / share and weighted roe is 17.71%.
Various businesses grew rapidly, and new products widened the profit space. In 2021, the sales volume and revenue of various products of the company increased significantly. Among them, the sales volume of recycling equipment was 106 units (year-on-year + 34.2%), and the revenue was 28 million yuan (year-on-year + 35.0%); The sales volume of finished frames was 50.34 million pieces (year-on-year + 11.7%), and the revenue was 1.12 billion yuan (year-on-year + 25.9%); The sales volume of PS particles was 54000 tons (year-on-year + 62.7%), and the revenue was 348 million yuan (year-on-year + 53.7%); The sales volume of PS frame and strip was 89500 km (year-on-year + 34.9%), and the revenue was 462 million yuan (year-on-year + 34.7%). The improvement of product sales volume drives the growth of the company's performance. In 2021, the company actively developed new products such as 3D grille panels and embossed wallboards. The revenue of end products including finished frames and decorative lines increased significantly by 28.4% year-on-year, making the company continuously improve the market share of incremental products while maintaining the stable growth of stock products.
Overseas projects were constructed in an orderly manner, and tpet capacity continued to expand. At present, the company's PS plastic recycling capacity is about 100000 tons, and its future goal is to expand to 300000 tons, and horizontally expand the renewable PET capacity to 1 million tons, as well as the recycling of PE, PP, HDPE and other varieties of plastics. As the company's main PS regeneration and granulation production base, the 50000 T / a PET recycling project has been in the stage of equipment installation and commissioning, customer negotiation and order receiving. It is expected that it will contribute considerable performance increment in 2022. In addition, in April this year, the company announced that it plans to invest about 800 million yuan to build a 100000 t / a multi category plastic bottle high-quality regeneration project in Malaysia, so as to further realize the expansion of the whole industrial chain in the world. Vietnam Yingke has built a "plastic decorative frame and wire rod project with an annual output of 2.27 million boxes" in Qinghua Province, and has also successively carried out preliminary work. In the next stage, it will focus on promoting the project production and capacity release. The company's future growth space will be further improved.
R & D investment ensures the technological competitive advantage of the company's integrated innovation. The company has six R & D and production bases in the world, aiming to become a world-class high-tech manufacturer of renewable resources. In order to improve the efficiency and quality of recycling, new processes and products have been continuously developed. The R & D expense rates in recent three years are 4.24%, 4.51% and 4.86% respectively. After years of independent research and development, the company has mastered many advanced production technologies in recycled plastic PS plastic recycling equipment, recycled granulation, line production, finished product frame processing, etc. these core technologies ensure the company's leading technology advantage in the industry.
Investment suggestion: it is estimated that the net profit attributable to the parent company in 2022, 2023 and 2024 will be 333 / 443 / 617 million yuan respectively, the corresponding EPS will be 2.50 / 3.33 / 4.64 yuan / share respectively, and the corresponding PE will be 24.16x/18.18x/13.05x 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; Risk of price fluctuation of recycled plastics; Risks of raw material supply and price fluctuation; Risks of policy changes in the location of overseas subsidiaries; The risk of intensified industry competition.
