National specialization in the new "Little Giant", focusing on the prevention and control of heavy metal pollution in the non-ferrous metallurgical industry
The company provides heavy metal pollution prevention solutions, pharmaceuticals and operational services for the non-ferrous metallurgical industry. On the basis of absorbing the technology of Academician Chai Liyuan of Central South University, and relying on its own R & D advantages, the company's environmental protection plan is economical and in coordination with shareholder Zijin Mining Group, and is expected to increase its market share in the decentralized heavy metal pollution control industry. It is estimated that the net profit of homing in 23-25 years is 0.99 billion yuan, and the PE in 23-25 years is 1.99 billion yuan, corresponding to that of 29-20-14. The average PE of comparable companies over the past 23 years is 30 times. Considering the scarcity of the company as the first listed company for the prevention and control of heavy metal pollution in China and the broad market for the prevention and control of non-ferrous heavy metal pollution, the company is given a "buy" rating of 35 times PE in 23 years, corresponding to the target price of 36.75 yuan, covering for the first time.
Heavy metal pollution prevention and control industry is mainly divided into sewage acid and wastewater treatment, the overall scale of the increase / stock market is huge, the total amount of sewage acid and wastewater in China is huge, of which about 12% of the waste acid and 32% of the waste water comes from the non-ferrous metallurgical industry. Traditional treatment technologies (lime neutralization, vulcanization, etc.) account for 90% of the current market for waste acid and wastewater. Compared with traditional methods, the bio-pharmaceutical method developed by the company can deal with more heavy metals, produce less waste, is more environmentally friendly, and can achieve higher economy through resource utilization. Acid and wastewater treatment includes new and modified solution market (incremental market) as well as project follow-up operation and pharmaceutical market (stock market).
According to our estimation, the potential market space of China's non-ferrous metal acid stock in 2022 is about 1.982 billion yuan, and the incremental market is 587 million yuan, while the potential market space of wastewater stock is about 30.247 billion yuan, and the incremental market is 4.318 billion yuan. The total market size exceeds 36 billion yuan.
The policy guides the transformation of environmental protection governance to resource utilization, and the improvement of heavy metal emission limits promotes the rapid development of the industry. In recent years, the Chinese government has promulgated, issued and revised a series of standards and norms, and continuously raised the requirements of heavy metal emission limits. It provides a good opportunity for the rapid development of heavy metal pollution control, while relevant policies actively guide the transformation from environmental protection to resource utilization. Taking "Comprehensive Utilization and harmless disposal Project of Copper smelting Resources in Zijin Copper Industry" as an example, the total investment of the proposed environmental protection project is 159 million yuan, assuming that the metals in the product can be recovered at 100%, and the resource space is expected to be 1978 million yuan per year. at the same time, the environmental protection facilities of the project can bring an annual income of 254700 yuan, and the environmental protection investment can achieve an additional return of about 12.60% while responding to the policy. We will further increase the willingness of capital expenditure in the field of environmental protection in the non-ferrous metallurgical industry.
Technological advantages help the company to increase its share in order to increase its storage, and fully coordinate with Zijin Mining Group in the upstream and downstream to achieve the decentralized pattern of acid and wastewater treatment in the non-ferrous industry. The company's main competitors are large-scale metallurgical design institutes and other units. Relying on the industry-university-research advantage of Central South University, the company obtains a higher market share in the incremental market, and gradually enters the stock market to further enhance the stock market share. In 2021, the market share of the company's new technology in the copper, lead and zinc industry for acid / wastewater and arsenic-containing hazardous wastes is 62.3%, 9.6% and 8%. The company works closely with Zijin Mining Group, the second largest shareholder, and Zijin Mining Group accounts for 27.0% of 2023H1's revenue. At the same time, the company invested in Zijin Mining Group's Zijin pharmaceutical extension metal extractant, mineral processing pharmaceutical and other business. In the future, the company is expected to rely on Zijin Mining Group to achieve coordinated upstream and downstream development.
Risk hint: the market promotion of new technology is unfavorable, the balance of accounts receivable is large, and the customer concentration is high.