Zhitong Financial APP learned that Societe Generale Securities released a research report saying that it maintained the "buy" rating of Conch Environmental Protection (00587). Taking into account the pace of industrial production and repair of the epidemic, it is estimated that the net profit of returning to its mother in 2022-24 is 56.2 / 790 million yuan, with a target price of 7.44 Hong Kong dollars. The company's competitors are declining, the market for hazardous waste disposal has hit bottom, and the collaborative disposal of cement kilns will quickly replace the traditional disposal, and it is still in a period of rapid growth in the acquisition of projects and capacity release, and after entering the "horse race enclosure", it is expected that 23Q1 will usher in a price bottom reversal. Anhui Conch Cement holding Conch Environmental Protection has also dispelled the hidden worries of the market on the distribution of long-term benefits.

According to the report, the current manufacturing waste production is insufficient, the disposal unit price continues to decline, and the clearance of the hazardous waste disposal industry is accelerated, and the industry pattern is expected to become clearer more quickly. The company has outstanding low-cost advantages, can still make a stable and strong profit, is far ahead in hand production capacity, and is expected to dispose of about 40% of hazardous wastes in 2022-26. At the same time, by using the collaborative disposal process of cement kiln, the disposal cost per ton is only about 600 yuan, which is less than half of the traditional enterprises, and the ROE is expected to reach 18% in 2022. Backed by Anhui Conch Cement, conch environmental protection has a first-mover advantage, giving full play to its technological advantages, resource advantages and the vitality of private enterprises. in the strategic layout of horse racing enclosures throughout the country, it has been put into production of 5.61 million tons / year of solid and hazardous waste capacity by the middle of 2022 and has signed a contract capacity of about 11.45 million tons / year.

The bank also mentioned that Anhui Conch Cement (00914) completed the acquisition of Conch Environmental Protection Holdings, the hidden worries about the distribution of long-term benefits were lifted, and the coordination is expected to be effectively increased. As of October 26, Anhui Conch Cement holding shares has reached 26.3%, firm support for the company, Anhui Conch Cement deputy general manager Li Xiaobo resigned from the post of Anhui Conch Cement to take up the post of general manager of conch environmental protection. Previously, the two have worked together more in cement kiln resource support, but the support will be further strengthened after this formal holding. It includes support in many aspects, such as helping to achieve cooperation among enterprises in the cement kiln collaborative hazardous waste disposal industry, and improving the priority of conch environmental protection cement kiln use.