首次覆盖，给予“ 增持”评级。我们预测公司2023-2025 年净利润分别为-1.56/3.78/4.12 亿元，对应EPS 分别为-0.27/0.65/0.71 元。考虑到，1）公司综合性金属再生资源设备制造与运营业务、电梯零部件业务双轮驱动；2）稀土供需矛盾提升回收再生必要性，公司为稀土回收再生，产品已获下游龙头认可；3）公司稀土回收再生业务延伸至钕铁硼磁材业务，产品附加值提升。给予公司目标价13.35 元，86%向上空间，“增持”评级。Introduction to this report:
China's tight balance between rare earth supply and demand is driving the expansion of the rare earth recycling market, and the company is expected to benefit as a rare earth recycling leader. At the same time, the company's rare earth business extends downward to the high-performance magnetic materials business, and it is worth looking forward to an increase in the added value of products.
Key points of investment:
Covered for the first time, a “gain” rating was given. We forecast that the company's net profit for 2023-2025 will be -1.56/378/412 million yuan, respectively, and the corresponding EPS will be -0.27/0.65/0.71 yuan, respectively. Considering that 1) the company's comprehensive metal recycling equipment manufacturing and operation business and elevator parts business are two-wheel drive; 2) the conflict between rare earth supply and demand increases the need for recycling. The company's rare earth recycling and regeneration products have been recognized by downstream leaders; 3) the company's rare earth recycling business has been extended to the NdFeB magnetic materials business, increasing the added value of the product. The company was given a target price of 13.35 yuan, 86% upward space, and an “increase in weight” rating.
Continuous mergers and acquisitions create a complete industrial chain for renewable resources, and technical capabilities have been recognized by downstream leaders. The company started its business as scrap treatment equipment and operation, and continued to expand the rare earth recycling and comprehensive utilization industry chain through acquisitions. High-purity rare earth oxide products are used in magnetic materials and communication equipment, and have been recognized by downstream leaders.
Total rare earth control has led to a long-term tight balance between supply and demand, which is expected to catalyze the expansion of the recycling market to exceed expectations.
Although China adjusted its annual rare earth production control plan in line with downstream demand, there was still a supply gap during the 13th Five-Year Plan period. The recycling of waste rare earths such as scrap can ease the conflict between supply and demand for rare earth ores, and the scale of the rare earth recycling market is expected to expand further under the catalyst of a tight balance between supply and demand.
The company's rare earth recycling industry chain extends to the field of NdFeB magnet customization, driving an increase in added value. NdFeB permanent magnet materials are the most important downstream application for light rare earths. Application scenarios for NdFeB magnets include wind power, industrial robots, communication satellites, inverter air conditioners, etc. The company has launched the rare earth permanent magnet material production business through Zhejiang Zhonghang. As of 2022, Zhejiang Zhonghang has a production capacity of 2,220 tons of sintered NdFeB magnetic steel blanks.
In 2023, the company further acquired Shandong Shuocheng to increase the production capacity of high-performance permanent magnet materials by 5,000 tons.
The market demand for customized magnetic materials is high-end, and the high technical threshold enhances the added value of the company's products.
Risk warning: the rare earth waste collection rate falls short of expectations, the risk of fluctuating raw material prices, etc.
