Bulk solid waste market space should be increment + stock total, the market space is broad. The annual increase of slag in China is about 8000, 1600 and 3000 tons per year for steel slag, copper slag and red mud respectively, and the stock of tailings is more than 3.5,100 million tons for copper slag and red mud respectively. The stock space is more than 500 billion yuan, and the incremental space is 1260 billion yuan / year. Shagang and Jinchuan projects have verified the reliability and leadership of the regenerative rotary hearth furnace technology.
The driving force of the compulsory environmental tax plus the project's own profit double income: (1) the environmental tax standard has been implemented for 18 years, steel slag and copper slag belong to smelting slag and red mud is dangerous waste, corresponding to 1000 yuan / ton. if the discharge is not treated, taxes and fees will be levied, forcing enterprises to deal with it. (2) the main business of some large enterprises is at a loss, but the solid waste treatment project itself is profitable, and even if the bulk price rises, the recycled useful metal products will superimpose the benefits and increase the driving force of the project.
Hydrogen shaft furnace will become another subversive technology, waiting for the demonstration project to be launched: (1) Energy saving and emission reduction of hydrogen shaft furnace is a characteristic of the process itself, that is, the reducing gas used is H2+CO, which is preheated by a regenerative heater, and then reacts with lump ore and pellets, which can be directly reduced and high quality steel can be produced by using low-grade iron ore. Coinciding with the loss of steel production capacity, clean smelting is bound to be the trend of the future. At the same time, the technology can also be used to replace clean smelting of ores, and can become an important growth point of the company. The market space is very broad.
(2) the core of the promotion of hydrogen shaft furnace lies in the price of raw material gas, and the price of natural gas in China is expensive, which is one of the reasons why there is no promotion, but one of the advantages of Shenwu energy-saving technology can make the shaft furnace adaptable. The reforming gas prepared by a relatively cheap method to form a reduction gas acceptable to the shaft furnace can reduce the cost and solve this painful point and obstacle in the promotion process. Hydrogen shaft furnace can replace blast furnace, such as demonstration project after landing, can dispel customers' doubts about the new technology.
(3) the company has recently adjusted its personnel and introduced Song Bin, president of the development of Baosteel. Mr. Song has rich industry experience and excellent management skills, which will strengthen the possibility of business development and cooperation with Baowu Group, which will play a positive role in promoting the development of the company in the future. In addition, Shenwu Energy Saving was originally a Jiangsu Design Institute, and the "entrance effect" of its customer resources should not be ignored.
Profit forecast and investment rating:
It is estimated that the company will achieve EPS of 0.51,1.08,1.70 yuan respectively in 16-18 years, and give it 30 times PE in 18 years, with a target price of 51.00 yuan, corresponding to a market capitalization of 32.5 billion yuan, and maintain a "buy" rating.
Risk hint: project settlement risk; project construction schedule risk.