\u3000\u3 Shengda Resources Co.Ltd(000603) 568 Zhejiang Weiming Environment Protection Co.Ltd(603568) )
Key investment points
Event: in 2021, the company achieved a revenue of 4.185 billion yuan, an increase of 34.00% at the same time; The net profit attributable to the parent company was 1.535 billion yuan, an increase of 22.13% at the same time; The weighted average roe decreased by 1.11 PCT to 24.91%.
The return to the parent company increased by 22% to RMB 1.535 billion, the project operation maintained high profitability, and the gross profit margin increased by 3.2pct to 66.55%. In 2021, the increase of revenue and return to parent company is mainly due to the increase of project operation and equipment revenue and the recognition of construction revenue for PPP projects under construction. The gross profit margin is 47.74% (-6.37pct) and the net profit margin is 36.75% (-3.45pct), which is mainly due to the low profit margin of construction revenue. In terms of business, 1) project operation: revenue of 1.581 billion yuan (+ 21.18%), gross profit margin of 66.55% (+ 3.20 PCT); 2) Kitchen disposal: revenue of 133 million yuan (+ 160.18%), gross profit margin of 55.54% (+ 5.08 PCT); 3) Equipment, EPC and services: revenue of 2.332 billion yuan (+ 38.02%), gross profit margin of 34.69% (- 14.12pct); 4) Garbage removal and transportation: the revenue is 87 million yuan (+ 31.79%), and the gross profit margin is 11.52% (+ 10.31pct).
By the end of 2021, 79% of the projects under preparation / built will ensure high growth, and the operation efficiency will be increased by 3% to 316 degrees / ton. In 2021, a total of 11600 tons / day of bid winning & M & A were added. By the end of 2021, the company's on hand production capacity reached 50700 tons / day, of which about 28400 tons / day were put into operation, about 22300 tons / day were under construction and preparation, and 79% were under preparation / built to ensure future growth. In 2021, the storage volume of domestic waste will increase by 28% to 6.64 million tons, the on grid power will increase by 32% to 2.1 billion kwh, and the on grid power will increase by 3% to 316 kwh / ton. The company plans to put 10 million tons of garbage into storage (+ 51%) and 2.9 billion kwh of online power (+ 38%) in 2022. 2022 is a big year of production, and we expect to continue the high growth trend.
Join hands with shengtun & Qingshan to invest 200000 tons of high nickel ternary cathode materials per year and promote the in-depth layout of new lithium battery materials. In 2021, the company joined hands with Qingshan to cut into new energy and planned the construction of high nickel matte project with an annual output of 40000 tons in Indonesia; On April 24, 2022, the company signed a cooperation agreement with shengtun and Qingshan to jointly develop high nickel matte refining, high nickel ternary precursor, high nickel cathode material production and related supporting projects in Wenzhou, and build an annual output of 200000 tons of high nickel ternary cathode material. The plan from high nickel matte to cathode materials has been gradually implemented, reflecting the company's determination to develop new lithium battery materials in depth.
Net operating cash flow increased by 25.35% to RMB 1.194 billion, which continued to improve. The increase in net operating cash flow of the company in 2021 was mainly due to the increase in cash received from the sale of goods; Net investment cash flow was - 2.12 billion yuan (+ 2.20%); The net cash flow from financing is 805 million yuan (- 41.43%).
The main business of solid waste is growing & leading in profit, and developing new energy together with Qingshan. The company's main business of solid waste is high growth & high profit. At the end of 2021, 28400 tons / day of waste incineration has been put into operation, with 79% growth space. In 2021, the operating gross profit margin was 67%, leading the industry. Benefit from a) cost side: the equipment is self-produced and has strong cost control ability. The ton investment of the project put into operation by the end of 2020 is 22% lower than the average of the same industry, and the depreciation and amortization during the operation period is low; b) Revenue side: in 2020 / 2021, the average processing fee of newly won projects was 91 / 95 yuan / ton, 19% / 6% higher than the industry average. From 2016 to 2021, the on grid power consumption per ton increased by 3% to 316 kwh / ton. The company joined hands with Qingshan to import Resources & technology, cut into the new energy track and open up growth space.
Profit forecast and investment rating: according to the construction progress, we will lower the parent company's forecast for 20222023 from 20.10/25.58 to 1.9382436 billion yuan. It is expected that the parent company will return to 3.272 billion yuan in 2024, and the EPS will be 1.49/1.87/2.51 yuan, corresponding to the current 15 / 12 / 9 times PE, maintaining the "buy" rating.
Risk tip: the progress of the project is not as expected, the partner Qingshan's position closing risk, policy risk and intensified industry competition.
