Utilization of rare earth waste: short-term price drop, long-term tight supply and demand, continue to be optimistic about Huahong. This week (April 18-april 22), the rare earth price index rose from – 6.5% to 336, and the average price of praseodymium and neodymium oxide rose from – 7.6% to 833000 yuan / ton.
Jiangsu Huahong Technology Co.Ltd(002645) released the 21st Annual Report. The revenue was + 101% to 6.78 billion yuan year-on-year, and the net profit attributable to the parent company was + 136% to 530 million yuan year-on-year. Among them, the net profit contributed by rare earth recycling was 353 million yuan, 4928 tons of rare earth oxide were sold (year-on-year + 71%), and the net profit per ton was 71000 yuan. According to the previous performance forecast of 22q1, the net profit attributable to the parent company was expected to be 230270 million yuan, a year-on-year increase of 71% – 100%, and a month on month increase of 63% – 91%, Considering that the price of praseodymium and neodymium oxide in 22 years is 380000 Yuan / ton (64%) higher than that in 21 years, we believe that although the short-term rare earth price has dropped, the downstream of rare earth is widely used in emerging industries such as new energy vehicles, energy-saving household appliances and wind power. The market demand is strong and the supply of rare earth oxide is in short supply. As the leader of rare earth waste utilization, the company is expected to continue to benefit. As of 422 million yuan market value, 2022pe (wind unanimously expected) is 14 times and 22q1 annualized PE is 10 times.
Biodiesel: the price of biodiesel in Europe and China has reached a new high, and the downstream application is still expanding. According to Argus official wechat news, with the biodiesel price of waste raw materials in Europe hitting another record high, many Chinese cargo holders took the opportunity to raise the quotation of biodiesel, the transaction level increased compared with the previous week, and the price of Chinese kitchen waste oil methyl ester ucome reached an all-time high. Japanese manufacturers mol and Trafigura pay attention to the supply of biodiesel marine fuel, and Japanese refinery ENEOS and trader Mitsubishi jointly develop saf (biological aviation coal). Rapeseed oil index is still at an all-time high (mom + 0.6%). We believe that waste oil and biodiesel have the attribute of rare varieties for carbon reduction, and the downstream application of biodiesel is still expanding, which is worthy of long-term optimism.
The epidemic situation is under pressure, and the collection of raw materials for biodiesel is affected by UCO. According to Argus official wechat news, although the logistics of East China port has recovered slightly, it is still far from the normal efficiency, and the supply of waste oil is affected by many restrictions on Hall food. UCO is facing greater competition in collecting China’s gutter oil and kitchen waste oil. In the middle of the week, the bidding prices of small quantities of high-quality UCOS sold by some food waste treatment plants jumped sharply, causing a great impact on the market. We believe that the short-term epidemic may lead to reduction, but support the high price of waste oil. We recommend Bece Legend Group Co.Ltd(000803) (based on the conservative 4% oil extraction rate of 3000 tons / day of consolidated treatment capacity in the whole year, 4 Tianma Microelectronics Co.Ltd(000050) 000 tons of self-produced oil and 10000 tons per day of three-year planning), while the cost and price of firewood plants are high, and the short-term volume and marginal profit may be under pressure, but it is expected to improve after the epidemic is alleviated, It is suggested to pay attention to the producers of raw firewood Zhejiang Jiaao Enprotech Stock Co.Ltd(603822) (annual production capacity of 150000 tons, commissioning capacity under construction of 350000 tons) and Longyan Zhuoyue New Energy Co.Ltd(688196) (annual production capacity of 400000 tons).
Recovery of precious metals and lithium batteries. 4.18-4.22, platinum was – 0.7% to 212 yuan / g, palladium was + 2.5% to 577 yuan / g, rhodium was – 3.1% to 4360 yuan / g, and gold futures was – 2.4% to 1930 US dollars / ounce. We believe that precious metal catalysts will benefit from the development of hydrogen energy industry and increase their consumption. Considering the carbon reduction effect of renewable resources, the regeneration of precious metals with high technical barriers under the background of carbon neutralization deserves attention. It is suggested to pay attention to Hootech Inc(301026) , Sino-Platinum Metals Co.Ltd(600459) . The price of industrial grade lithium carbonate increased from – 2% on a weekly basis to 453000 yuan / ton, with an average of 420000 yuan / ton in 22 years, an increase of 262% compared with the average price of 116000 yuan / ton in 21 years. It is suggested to pay attention to: lithium battery recycling Miracle Automation Engineering Co.Ltd(002009) (lithium carbonate capacity 180190 tons / month, up to 5000 tons / year in 2023), Wangneng Environment Co.Ltd(002034) .
Trend of other renewable resources. 4.18-4.22, scrap prices rebounded slightly, from + 6 yuan / ton (+ 0.2%) to 3511 yuan / ton; The price of waste paper continued to rebound, with a week-on-week increase of + 4 yuan / ton (0.2%); The price of waste aluminum increased from + 77 yuan / ton (0.5%) to 15240 yuan / ton on a weekly basis; The price of scrap copper increased from + 258 yuan / ton (0.4%) to 67480 yuan / ton on a weekly basis; Waste plastic recycling, insufficient follow-up of new downstream orders, decreased purchasing capacity of recycled materials, superimposed with poor transportation in some areas, and further weakened demand. We believe that due to the impact of the epidemic, the supply of renewable resources is tight and the demand is slow. We need to pay more attention to the resumption progress and the release intensity of China’s demand. It is suggested to pay attention to: Zhejiang Rongsheng Environmental Protection Paper Joint Stock Co.Ltd(603165) (waste paper, 610000 tons of base paper sales in 21 years), Zhefu Holding Group Co.Ltd(002266) Beijing Geoenviron Engineering & Technology Inc(603588) Shandong Intco Recycling Resources Co.Ltd(688087) Shandong Intco Recycling Resources Co.Ltd(688087) pet under construction, 50000 tons +100000 tons of high-quality regeneration).
Investment advice. We think that in the context of double carbon, we believe that under the background of double carbon, the support for renewable resources is expected to continue to increase, and the long-term volume and price of the sector can be expected: Hongda Xingye Co.Ltd(002002) 645 009 (lithium battery recycling), Grandblue Environment Co.Ltd(600323) (waste power generation).
Risk warning. Primary resources drive the price fluctuation of renewable resources; EU countries will reduce the mixing proportion in the short term.
