\u3000\u3000 Beijing Geoenviron Engineering & Technology Inc(603588) (603588)
Event: the company announced a pre increase in performance in 2021. It is expected to realize a net profit attributable to the parent company of 720 million yuan to 800 million yuan in 2021, with a year-on-year increase of 30.89% to 45.44%, and deduct a net profit not attributable to the parent company of 686 million yuan to 766 million yuan, with a year-on-year increase of 26.42% to 41.16%, which is in line with our expectations.
The performance is expected to increase in 2021, focusing on the recycling of solid and hazardous wastes. The company expects to realize the net profit attributable to the parent company of 720 million yuan to 800 million yuan in 2021, with a year-on-year increase of 30.89% to 45.44%, and the net profit deducted from non attributable to the parent company of 686 million yuan to 766 million yuan, with a year-on-year increase of 26.42% to 41.16%, which is in line with our expectations. In 2021, the company focused on its main business and its main business was in good condition. Among them, 1) the solid hazardous waste resource utilization business in key sectors was carried out smoothly, and the revenue and profit increased significantly year-on-year; 2) The number of domestic waste incineration power plants put into operation increased compared with the same period, and the revenue and profit increased year-on-year. The growth of operating business led to a high increase in the net profit attributable to the parent company, an increase in the proportion of operating business profit and an improvement in profit quality.
Rapid expansion of resource-based production capacity and improvement of deep resource-based. 1) As of December 31, 2020, the approved scale of hazardous wastes in hand of the company was 53599 tons / year. The projects under Construction announced include Chongqing Yaohui (100000 t / a), Guizhou project phase I (350000 T / a), Jiangxi Xinke (310000 T / a), Jinchang project (100000 t / a) and jiatianhe (30000 T / a medical waste plastic + 40000 t / a medical waste glass), with a total of 930000 T / A. the proposed projects include new materials in Sihong, Jiangsu, and the resource scale is expanding rapidly. 2) The company has improved the deep resource layout at the same time. Among them, Jiangxi Xinke has built a new 100000 ton electrolytic copper and other multi metal deep processing production line to lay out the deep resource layout of copper, tin, lead and other metals and rare and precious metals. The company acquired xinshengyuan and sine wave, and its products include high-quality nickel oxide, electronic grade nickel oxide and battery grade cobalt nickel sulfate, so as to layout the deep recycling of nickel and realize the entry of new energy material industry chain. At the same time, the front-end scale expansion gradually improves the layout and is deeply resourced, and the scale and profitability are expected to rise.
Profit forecast and investment rating: the value of dual carbon target renewable resources is prominent, the company’s front-end production capacity is rapidly expanded, and the layout is deeply resourced. We maintain the net profit attributable to the parent company of RMB 770 / 10.0 / 1.31 billion from 2021 to 2023. Considering the impact of this non-public offering on the total share capital of the company, the corresponding EPS from 2021 to 2023 are RMB 0.72/0.78/1.02 respectively. The current market value corresponds to pe23 / 22 / 16 times from 2021 to 2023. The company is expected to replicate Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) fine management ability, create a leader in hazardous waste recycling, increase the proportion of operation and maintain the “buy” rating.
Risk tip: the construction of hazardous waste production capacity is less than expected, the utilization rate of production capacity is less than expected, and the competition is intensified
