\u3000\u3 Shengda Resources Co.Ltd(000603) 588 Beijing Geoenviron Engineering & Technology Inc(603588) )
Revenue grew steadily and net profit increased sharply. In 2021, the company achieved revenue of 7.83 billion yuan (YoY + 14.6%), of which Q4 achieved revenue of 2.34 billion yuan (yoy-6.7%) in a single quarter. The annual net profit attributable to the parent company was 730 million yuan (YoY + 32.0%). Among them, Q4 realized a net profit attributable to the parent company of 140 million yuan (YoY + 4.4%). In 2022, Q1 achieved revenue of 1.57 billion yuan (YoY + 23.8%) and net profit attributable to parent company of 170 million yuan (YoY + 42.9%). The company's revenue and profit increased significantly, mainly due to the good operation of its main business, the smooth development of solid and hazardous waste recycling business in key sectors, and the increase of domestic waste incineration power generation projects compared with the projects put into operation in the same period of last year.
The expenses are properly controlled and the gross profit margin of the business fluctuates greatly. In 2021, the company's annual gross profit margin was 24.4% (YoY + 1.22pct) and net profit margin was 9.3% (YoY + 1.2pct). The gross profit margin of solid waste treatment operation is 21.6% (year-on-year - 10.5pct); Among them, the gross profit margin for the resource utilization of solid and hazardous wastes decreased by 12.6pct, mainly due to the large total amount of raw materials purchased in the current period, the high unit value and the compression of gross profit space; The gross profit margin of domestic waste treatment project increased by 25.8pct, mainly due to the high investment cost of several waste incineration projects in the previous year. The gross profit margin of solid waste treatment and disposal project / environmental remediation project was 28.2% (year-on-year + 15.4pct) / 30.97% (year-on-year -1.45pct). In 2021, the annual management expense rate was 4.8% (YoY - 0.0pct), the sales expense rate was 1.3% (YoY - 0.1pct), and the financial expense rate was 3.2% (YoY + 0.1pct). The company's net operating cash flow was 607 million yuan, a year-on-year decrease of 44.3%.
The three solid waste sectors continued to advance. By sector, (1) resource utilization of solid and hazardous wastes: 3.49 billion yuan (YoY + 155.70%); (2) Harmless disposal of solid and hazardous wastes: the income is 360 million yuan (YoY + 31.1%); At present, the company has 12 mature domestic waste incineration power generation projects, with an operation scale of 9500 tons / day; After the completion of the remaining waste incineration projects, the total treatment capacity is 11600 tons / day. (3) Engineering orders: the amount of Engineering orders signed in 2021 was 2.47 billion yuan, including 1.47 billion yuan of repair orders (1.28 billion yuan in 2020).
Under the background of "carbon neutralization", focus on the recycling direction of hazardous wastes. We believe that the recycling of hazardous wastes is worth looking forward to: 1 Compared with primary metals, recycled metals can significantly reduce carbon emissions and have great development prospects under the background of "carbon neutralization" and circular economy. 2. In recent years, the supervision has become stricter, and the real demand for hazardous wastes dumped and underreported in the past has been gradually released. According to China's hazardous waste industry network, China's industrial hazardous waste output is about 5558 tons in 2021 and cagr10.5 tons in five years 7%。 The company has obvious advantages in the field of hazardous waste recycling, leading the industry in production capacity and metal refining capacity. The production capacity is expected to exceed 1.1 million tons / year in 2022. The company has excellent management level and is expected to rebuild the Yuhong miracle in the field of hazardous waste by relying on the core competitiveness accumulated by the management in Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) .
Investment suggestion: the company has many operation projects such as waste incineration and hazardous waste, which will bring sustained performance growth after being gradually put into operation in the future. As a leading enterprise in soil remediation, the company's remediation orders are also worth looking forward to. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 960 / 12.5 / 1.68 billion, the corresponding EPS will be RMB 0.9 / 1.2 / 1.6 per share, and the corresponding PE will be 15.1 / 11.5 / 8.6x respectively, maintaining the "buy" rating.
Risk tip: the progress of incineration capacity launch is not as expected, and the release of orders in the soil remediation market is not as expected
