\u3000\u3 China Vanke Co.Ltd(000002) 645 Jiangsu Huahong Technology Co.Ltd(002645) )
After hours, the company released its annual report for 21 years. The annual revenue was 6.78 billion yuan, a year-on-year increase of + 101%, and the net profit attributable to the parent company was 530 million yuan, a year-on-year increase of + 136%, which was in line with the expectations of the previous performance express;
The rapid expansion of rare earth recycling capacity benefited from the expansion of production and the rise of rare earth prices. The company's rare earth recovery business achieved a revenue of 3.25 billion yuan, a year-on-year increase of 206%, and achieved a sales volume of 4928 tons of rare earth oxides, a year-on-year increase of + 71%. The subsidiaries Xintai technology and Jiangxi Wanhong achieved net profits of 321 million yuan and 32 million yuan respectively. It is estimated that the profit per ton reached 72000 yuan, which is the best level in history. It is mainly due to the continuous rise of rare earth prices in 21 years, and the annual average prices of praseodymium and neodymium oxide / dysprosium oxide / terbium oxide were + 89% / + 46% / + 88% year-on-year respectively. In 22 years, although the price of praseodymium and neodymium oxide rose and fell in April, it was still at a high level of 800000 yuan / T, and the average price of 22q1 increased by nearly 30% month on month compared with 21q4. In early April, the company released the 22q1 performance express, which is expected to achieve a profit of 230 ~ 270 million yuan, a year-on-year increase of + 70 ~ 100%;
The leading position of scrap equipment is stable, and the automobile disassembly is carried out in an orderly manner. The company's renewable resource equipment and scrap steel and scrap car dismantling operation achieved revenue of 1.48 billion yuan and 1.1 billion yuan respectively, with a year-on-year increase of + 59% and 77%. The scrap equipment sector has a high prosperity. Under the background of double carbon policy, China's iron and steel industry vigorously promotes the recycling of scrap steel to reduce its dependence on iron ore. In terms of scrap operation and automobile disassembly, the company continued to promote the construction of three bases in Donghai, Qian'an and Beijing. During the year, the relevant policy dividends continued. The Ministry of industry and information technology and other four departments issued the pilot implementation plan for the extension of producer responsibility of automobile products in June 2021, proposing to form a recycling mode of scrapped vehicles with a number of replicable and popularized automobile production enterprises as the main responsibility body by 2023, and the comprehensive utilization rate of resources will reach 75%;
Investment advice. With the technological transformation and capacity expansion of Jiangxi Wanhong, the performance of the company's rare earth recycling sector is expected to continue to grow. Considering the recent continuous rise in rare earth prices, the company slightly raised its profit forecast. It is estimated that the company's net profit attributable to the parent company from 2022 to 2024 will be RMB 720million, RMB 870 million and RMB 980 million respectively. In response to the previous market value of 15 13 11x, the company maintains the "buy" rating.
Risk tips: 1. Rare earth prices continue to fall; 2. The project is put into operation less than expected; 3. The competition pattern of rare earth recycling industry deteriorated beyond expectations.
