危废、电废仍有成长空间，期待产能利用率爬坡。（1）危废板块，公司21 年废矿物油收集能力提升至6 万吨/年（20 年同期仅3 万吨/年），而2022 年实际生产量为2.81 万吨/年，产能利用率为49.3%；（2）电废板块，公司2021 年电废拆解许可能力由230 万台/年提升至360 万台/年，而222 年公司实际拆解为257.83 万台，产能利用率仅为71.5%。Core views:
The price of waste oil increased and dismantled production capacity was released, and the company's performance continued to grow steadily. The company released its 2022 annual report. For the full year of 2022, it achieved operating income of 800 million yuan (+51.67% year-on-year) and Guimu's net profit of 55 million yuan (+7.09% year-on-year). The revenue growth rate was significantly higher than the performance growth rate:
(1) Under the rise in energy prices, the company's procurement and sales prices of waste mineral oil raw materials increased dramatically; (2) the production capacity released by dismantling household appliances, dismantling sales increased 37.04% year-on-year.
There is still room for growth in hazardous waste and electrical waste, and we expect production capacity utilization to rise. (1) In the hazardous waste sector, the company's waste mineral oil collection capacity increased to 60,000 tons/year in 21 (only 30,000 tons/year in the same period in 2020), while the actual production volume in 2022 was 28,800 tons/year, with a capacity utilization rate of 49.3%; (2) in the electric waste sector, the company's electric waste dismantling capacity increased from 2.3 million units/year to 3.6 million units/year in 222, while the company's actual dismantling in 222 was 2,577,300 units, and the capacity utilization rate was only 71.5%.
The plan is to increase the acquisition of “Tiger Ge Environment” and accelerate the deployment of the “waste-free city” garbage sorting market. The company's acquisition plan to acquire 100% of the shares of the majority shareholder's holding asset “Tiger Ge Environmental” for $91 million is continuing to advance, accelerating the deployment of a trillion-level waste-free city market. By the end of 2022, Tiger had covered 820,000 households, and the recycling rate of recyclables had reached 95%. It had achieved coverage in 6 districts/counties under 4 cities in Zhejiang Province, and was continuing to reduce costs and increase efficiency due to scale effects. Benefiting from the catalytic demand for “waste-free cities” and Zhejiang Province's “waste-free Asian Games” policy, Tiger Ge Environment has received research visits from many national and provincial government departments since July 2022, and two new Wenzhou projects have already been signed and landed. The “Tiger Brother Model” is expected to usher in a period of rapid fission.
Profit forecasts and investment recommendations. Excluding asset acquisitions, the company's net profit for 2023-2025 is estimated to be 0.80/1.15/139 million yuan respectively, and the corresponding PE is 37.02/25.75/21.40 times.
There is still room for expansion of the company's electricity waste production capacity. In the future, after the merger and acquisition of Tiger Environment, the entire industry chain will be opened up to further enhance recycling capacity and lay out a “waste-free city”. Referring to the growth rate and the valuation of peers, PE was given 40 times that of 2023, corresponding to a reasonable value of 38.16 yuan/share, maintaining the “buy” rating.
Risk warning. Acquisitions fell short of expectations; fund subsidy standards declined; receivable fund subsidies lagged behind.
