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Huachuang Nonferrous team went to the company for field research on December 29, 2016 and arranged a research brief for investors' reference.
Main viewpoints
1. Electrolytic lead faucet with a production capacity of up to 400000 tons
The company is mainly engaged in smelting and import and export of non-ferrous and precious metal products, such as electrolytic lead, gold, silver, cathode copper, sulfuric acid, copper, antimony, bismuth, industrial zinc sulfate, zinc oxide and so on. Among them, the operating income of electrolytic lead, gold and silver accounts for about 74% of the company's main business income, which is the company's main products. At present, the company has a production capacity of 400000 tons of electrolytic lead, 5 tons of gold, 1000 tons of silver, 550000 tons of sulfuric acid and 100000 tons of cathode copper.
two。 Based on the circular economy, the annual treatment capacity of lead-acid batteries is 540000 tons, and the subsequent capacity is expected to expand to 720000 tons.
The company has three 180000-ton storage battery / annual treatment systems, with an annual production capacity of 540000 tons of waste lead-acid batteries, all of which adopt the self-developed advanced technology of "automatic separation of waste lead-acid batteries-bottom blowing smelting recycled lead". It creates a new mode of combining regenerated lead with primary lead. It is expected that the company will continue to build the third phase of the waste lead-acid battery comprehensive treatment project (180000 tons / year), when the company's annual treatment capacity of waste lead-acid batteries will reach 720000 tons. In this non-public offering, the company invested 900 million yuan to build an annual recycling system of 720000 tons of waste lead-acid batteries to provide raw material protection for the company's waste lead-acid battery treatment capacity. In 2015, the company recycled 200000 tons of lead-acid batteries, corresponding to about 130000 tons of recycled lead metal, accounting for about 1 percent of the company's electrolytic lead production.
3. Environmental protection is stricter, the concentration of recycled lead market is significantly increased, and the leading enterprises are always strong.
In July 2016, the Central Environmental Protection Supervision team was stationed in eight provinces including Inner Mongolia, Heilongjiang, Jiangsu, Jiangxi, Henan, Guangxi, Yunnan and Ningxia. In November 2016, the second batch of environmental protection inspections were stationed in seven provinces, including Beijing, Shanghai, Hubei, Guangdong, Chongqing, Shaanxi and Gansu. The stricter environmental protection directly led to the decrease of the number of lead smelting enterprises in Henan to about 10, and the handling capacity of regular lead-acid battery production enterprises increased significantly. The company is currently recognized as one of the two companies that meet the requirements for access to recycled lead. Profits in the recycled lead sector rebounded significantly from the third quarter and continued to the fourth quarter, with an expected profit of 100 million for the whole year.
The value-added tax rebate for recycled lead enterprises has been reduced from 50% to 30%, the slope of government subsidies (value-added tax rebates) has accelerated the withdrawal of inefficient production capacity, and the competitive advantages of leading enterprises with scale advantages have been highlighted.
4. Risk Tips:
Decline in environmental supervision; decline in preferential tax policies; decline in lead-acid battery demand