The Ministry of Industry and Information Technology will promote the recycling of power batteries this year will face the outbreak of the first year

According to media reports, the China Automobile Power Battery Industry Alliance Recycling Branch was established in Beijing recently. Gao Yunhu, Director of the Department of Energy Conservation and Comprehensive Utilization of the Ministry of Industry and Information Technology, pointed out at the inaugural meeting that the Ministry of Industry and Information Technology will expedite the implementation of the interim measures for the management of the recovery and utilization of power batteries for new energy vehicles, promote the development of standards systems, and build a national energy monitoring and tracking integrated management platform for renewable energy vehicles. To carry out pilot demonstrations and actively explore the diversified recycling market model with strong technical and economical resources and environment friendly.

In recent years, China’s new energy vehicle market has been increasing, and as the core of new energy vehicles, battery usage has risen. Industry insiders predict that starting from 2018, the first batch of domestic automobile power batteries entering the market will usher in the “end of life scrap”. The agency expects that the waste power battery recycling market will start its outbreak in 2018 and reach a scale of 5 billion yuan in that year. By 2020 and 2023, the size of the waste power battery recycling market will further increase to 13.6 billion yuan and 31.1 billion yuan. The waste battery recycling industry chain company will benefit significantly, and the organization suggests focusing on GEM, Dongfang Seiko, and Nandu Power.

Stocks report

Green Beauty

Focusing on the advent of the new energy battery 3-5 years of scrap peak, lock in resources. The company has an industry-leading recovery and extraction technology, professional recycling, is the absolute leader in the country. The company has a recycling-dismantling-coarse sorting-fine sorting-parts remanufacturing model of end-of-life complete recycling vehicle industry chain, to maximize the implementation of end-of-life vehicle harmless and resource-based disposal. Vehicle manufacturers and battery companies sign the contractual terms, under the same conditions, the company will obtain preferential procurement rights, and the company is expected to realize operating revenue of RMB 10.348 billion, RMB 14.352 billion, and RMB 20.279 billion in 2017, 2018 and 2019 respectively. 32.1%, 38.7% and 41.3% of the total net profit was 644 million yuan, 831 million yuan and 1.097 billion yuan, and the corresponding EPS was 0.17 yuan, 0.22 yuan, and 0.29 yuan, and the corresponding PE was 49.6 times, 38.5 times, and 29.1 times. The company is given 52-56 times of PE in 2017, and the reasonable range is 8.84-9.52 yuan. The current price is close to a reasonable range, giving a "carefully recommended" rating.

Oriental Seiko

Prader, a wholly-owned subsidiary, recently signed the "Strategic Cooperation Framework Agreement" with BAIC Group, Ningde Times, and Peking University's Advance Branch to carry out strategic cooperation in various businesses including power battery R&D, manufacturing, recycling, and cascade utilization. The company announced the third quarter of 2017 report. From January to September 2017, the company realized operating income of 2.337 billion yuan, an increase of 115.46% year-on-year; net profit attributable to the mother was 205 million yuan, an increase of 182.62% year-on-year; and the company achieved operating income of 1.288 billion yuan in the third quarter. , an increase of 172.88%; to achieve net profit of 70.21 million yuan, a year-on-year increase of 153.68%. It is expected that the company's operating revenue for 2017-2019 will be 6.49 billion yuan, 10.22 billion yuan and 11.86 billion yuan, net profit attributable to the mother will be 562 million yuan, 781 million yuan and 905 million yuan respectively, and EPS will be 0.49 yuan, 0.68 yuan and 0.79 yuan respectively. The corresponding PE is 27.6X/19.9X/17.2X, maintaining the "strongly recommended" rating with a target price of 17.4 yuan.

Nandu Power Supply

Relying on its wholly-owned subsidiary, HuaBao Technology, has taken the lead in the global lead recycling field and built a lithium recycling industry chain. The profitability of the company's recycled lead business is mainly affected by the price difference between raw materials and products and tax rebates. According to our calculations, from January to September 2017, the net profit of China Recycled lead units was approximately RMB 2,100/tonne, which was approximately RMB 640/tonne higher than that of 2016. According to the estimated lead price increase of RMB 1,000, the tax rebate will affect the company’s unit net profit of RMB 80. / Ton, the average price of lead during the same period was RMB 18,088/ton, which was RMB 3,482/ton higher than that of 2016. Therefore, the lead price increase from January to September contributed RMB 280/ton to the unit's net profit; in addition, the benefit of environmental supervision was strict, and waste The spread of batteries and recycled lead expanded, and Hua platinum’s unit profit increased by RMB 360/t. We believe that with the further upgrade of environmental protection verification, Huabao will fully benefit as a leader in the reclaimed lead industry. Assuming that the price of lead will decline by 10% each year in the future and the expansion of the company (from 300,000 tons to 800,000 tons), the future earnings will still be higher. A large increase, taking into account all consolidation effects, will make a greater contribution to the growth of the company's performance. It is expected that the company's EPS for 2017-2019 will be 0.64/0.97/1.57 yuan/share, respectively, so we continue to maintain our BUY rating.