The leader of recycled plastics industry, the layout of plastic "recycling-recycling-utilization" industry chain. The company has been ploughing the field of recycled plastics for 20 years, and has established a complete product research and development and commercial industry chain around plastic recycling, including plastic recycling, plastic recycling, recycled materials and product marketing and other stages. establish a global recycling and marketing network for renewable plastics. Under the background of gradually attaching importance to plastic recycling around the world, the company's revenue increased from 1.017 billion yuan in 2017 to 1.99 billion yuan in 2021, with CAGR of 18.27%, and net profit increased from 67 million yuan in 2017 to 240 million yuan in 2021, with CAGR of 37.57%. The company currently has 100000 tons of PS foam recycling processing and 50, 000 tons of PET beverage bottle recycling capacity, annual production of 1.2 million cases of PS imitation wood frame. With the company's new "annual production of 2.27 million boxes of plastic decorative frames and wires", "annual production of 1000 sets of renewable PS plastic recycling machinery" and "annual production of 150 sets of waste plastic intelligent recycling equipment R & D and production" and other projects have been put into production, the future performance is expected to continue to grow.

Recycled plastics have great potential for development, and recycled PS+PET brings hundreds of billions of markets. The development of recycled plastics can not only effectively alleviate the increasingly serious plastic pollution problem, but also reduce the exploitation of oil and other raw materials from the source, and help reduce carbon emissions, so it is favored by countries all over the world. Around the demand side and supply side of the recycled plastics industry, major countries actively introduce relevant policies to clarify the permeability targets of recycled plastics and the recovery targets of waste plastics. McKinsey predicts that 50 per cent of the world's plastics will be recycled or reused in 2030, reaching 220 million metric tons per year, and the annual market for recycled plastics will reach $55 billion. We expect that the company mainly involved in recycled PS, PET plastic market will usher in rapid development, 2025 market space is expected to exceed 120 billion yuan.

The four advantages create strong competitiveness and have the strength to expand the business. The company has significant competitive advantages in the field of plastic recycling: first, the advantage of the whole industry chain, the coordinated development of various links, vertical regulation to improve profitability, which can effectively resist the risk of price fluctuation of recycled particles; second, the advantage of global channels. the company lays out the global recycling and marketing network, sets up the global high-quality customer resource system, and is in the leading position in purchasing cost and order ability. Third, large-scale advantages, huge production capacity helps to improve the company's bargaining power on upstream raw materials, and constantly reduce unit production costs to achieve cost reduction and efficiency; fourth, technological research and development advantages, the company's technical level is in a leading position in the industry, in recycled plastic recycling equipment, particles, lines, finished frames and other aspects of the master of many advanced production technology, and is expected to continue to maintain. With the help of the above advantages, it will help the company to further expand and optimize its own business, and then continue to consolidate the existing advantages and achieve a virtuous circle.

Investment suggestion and valuation: the recycled plastics industry has a broad market space. With its advanced technological advantages, extensive recycling channels and global marketing network, the company has set up a high-quality customer resource system and laid out the whole industry chain of "recycling-recycling-utilization". With the continuous horizontal and vertical expansion of the company's business, it is expected to embark on the fast track of development. We estimate that the company's income from 2022 to 2024 will be 2.47 billion yuan, 3.098 billion yuan and 4.354 billion yuan respectively, the revenue growth rate will be 24.1%, 25.4% and 40.6% respectively, and the net profit will be 282 million yuan, 368 million yuan and 534 million yuan respectively. The net profit growth rate reached 17.8%, 30.3% and 45.1% respectively.

Risk tips: higher risk of overseas sales revenue, lower-than-expected risk of project construction, risk of cross-border supply of raw materials, etc.