\u3000\u3 Shengda Resources Co.Ltd(000603) 588 Beijing Geoenviron Engineering & Technology Inc(603588) )
Event description:
In 2021, the company achieved an operating revenue of 7.827 billion yuan, a year-on-year increase of 14.65%; The net profit attributable to the parent company was 726 million yuan, a year-on-year increase of 32.03%. In the first quarter of 2022, the company achieved an operating revenue of 1.566 billion yuan, a year-on-year increase of 23.84%; The net profit attributable to the parent company was 170 million yuan, a year-on-year increase of 42.85%.
Comment event:
The business of resource utilization of solid and hazardous wastes has been expanded rapidly, the industrial chain has been extended, and the categories have been widened. In 2021, the company completed the acquisition of Jiangxi Xinke, Chongqing Yaohui environmental protection, xinshengyuan and sine wave, expanded the types of front-end solid and hazardous waste recycling and treatment, extended to the deep processing of back-end metal products, arranged the fields of nickel oxide and battery grade nickel cobalt sulfate, and extended the industrial chain. Meanwhile, high energy Pengfu and Jingyuan high energy have completed the transformation, the capacity scale and production efficiency have been improved, and the competitiveness of resource-based disposal has been further improved. At present, the company's designed disposal capacity for resource utilization of solid and hazardous wastes has reached 1026300 tons / year, and the harmless disposal capacity is 122600 tons / year.
Operating revenue increased significantly, accounting for more than 60%. In 2021, the company's operating revenue reached 4.842 billion yuan, a year-on-year increase of 128.56%, accounting for 61.87% of the overall revenue, exceeding the project revenue for the first time. Among them, the revenue from the resource utilization of solid and hazardous wastes was 3.494 billion yuan, a year-on-year increase of 155.7%; Domestic waste treatment achieved a revenue of 928 million yuan, a year-on-year increase of 156.77%; The harmless disposal of solid and hazardous wastes achieved a revenue of 364 million yuan, a year-on-year increase of 31.13%.
The gross profit rate increased slightly and the cash flow decreased. In 2021, the gross profit margin of the company was 24.37%, with a year-on-year increase of 1.21pct; The net interest rate was 10.61%, a year-on-year increase of 1.28pct. The company's net operating cash flow was 607 million yuan, a year-on-year decrease of 44.26%, mainly due to the company's increase in the procurement of raw materials for solid and hazardous waste recycling business. Most of the inventory commodities formed after harmless treatment and efficient resource recovery of some raw materials were sold in the fourth quarter, while part of the collection was delayed to the first quarter of 2022, and the remaining materials have not been produced and sold.
We believe that the ratio of waste resources to solid resources will be expanded rapidly, and the company's profit will be greatly enhanced. It is estimated that the net profit attributable to the parent company in 2022, 2023 and 2024 will be RMB 951, 12.34 and 1.67 billion respectively, corresponding to 15 / 12 / 9 times of PE. It will be covered for the first time and given a "buy" rating.
Risk warning: commodity price fluctuation risk; New orders are less than expected; The production capacity improvement progress of the project in operation is less than expected; Risk of rising raw material prices; Goodwill impairment risk.
