\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 03 Bece Legend Group Co.Ltd(000803) )
Event: Bece Legend Group Co.Ltd(000803) released the first quarterly report of 2022: in 2022q1, the revenue was 338 million, with a year-on-year increase of 75.73%, and the net profit was 403845 million yuan, with a year-on-year increase of 300.69%. The net cash flow was -92 million yuan, and the cash outflow increased by 70.57% year-on-year. Roe (weighted) was 3.01%, with a year-on-year increase of 1.46 percentage points.
The profitability of the company has been greatly improved, and the UCO industrial chain is expected to continue its high boom. During the reporting period, the gross profit margin of the company’s sales increased by 1.55 percentage points to 34.02% year-on-year, and the expense rate decreased by 8.39 percentage points to 14.78% year-on-year, which significantly increased the net profit margin of the company’s sales by 5.93 percentage points to 12.72% year-on-year, and significantly improved its profitability. The supply of biodiesel in Europe exceeds the demand, which drives the UCO price of the company to rise sharply, resulting in a sharp increase in the company’s performance. At present, the UCO price in China exceeds 9000 yuan / ton.
UCO is a scarce non food based biodiesel raw material. As the EU’s requirements for the mixing proportion of biofuels in the transportation field will be further improved, Europe is in short supply; 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 the long-term demand for biodiesel is expected to open. UCO biodiesel industry chain is expected to maintain a high boom.
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 area has four times the space, which is expected to continue to grow steadily. 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.
Profit forecast and rating description
It is estimated that the net profit attributable to the parent company in 2022, 2023 and 2024 will be 182 / 275 / 408 million yuan respectively, the corresponding EPS will be 0.75/1.13/1.68 yuan / share respectively, and the corresponding PE will be 18x / 12x / 7.9x respectively. The company’s UCO biodiesel has a high boom period and maintains the “recommended” rating.
Risk tips:
The risk that the project progress speed is lower than expected; Downside risk of recycled oil price; Risk of insufficient capacity utilization of food waste treatment project; Risks of policy changes related to food waste; The risk of intensified industry competition.
