The "2022 China Garbage Classification and Treatment Special Investigation and In-depth Analysis Report" covers the policy environment, market demand, competition pattern, development of key provinces and cities in the country, the operation status of leading enterprises, the layout and progress of various subdivisions, industry development trends and prospect forecasts, investment opportunities and other in-depth content and comprehensive data.
The "2022 China Garbage Classification and Treatment Special Investigation and In-depth Analysis Report" has a high reference value for predicting the demand prospects of the garbage classification and treatment industry, the trend of national policies, the business layout of competitors, the firm grasp of investment opportunities in related fields, and the formulation of company response strategies and implementation plans.
First, the company's main business
Over the past 19 years, Grimme has been practicing the industrial concept of "limited resources, unlimited circulation", focusing on the development of advanced recycling technology, continuously expanding the scale of waste treatment, and building three core recycling industrial clusters of waste batteries and rare metal waste recycling, electronic waste recycling and scrap car recycling. The Grimme recycling industry runs through China, covering Guangdong, Hubei, Hunan, Jiangxi, Henan, Shanxi, Inner Mongolia, Zhejiang, Jiangsu, Tianjin, Fujian eleven provinces and municipalities directly under the Central Government, with a vertical and horizontal length of 3,000 kilometers; the total annual waste treatment is more than 5 million tons.
Figure 1: Grammy's business layout in the five major industries and value chains
Source: Wind, Weber Consulting
At present, Grimme has built 7 battery material remanufacturing centers, 3 waste plastic remanufacturing centers, 6 electronic waste green treatment centers, 3 hazardous solid waste treatment centers, 7 scrap car recycling and processing centers, 2 cemented carbide tool remanufacturing centers, 3 power battery comprehensive utilization centers, 5 scrap steel processing and distribution centers, and built a large recycling industrial chain of waste batteries and power batteries, a large recycling industry chain of cobalt and tungsten resources and cemented carbide, an electronic waste recycling industry chain, and a scrap car comprehensive utilization industry chain. There are five major industrial chains, including waste residue, waste mud and wastewater recycling industry chain.
Second, the overall operating conditions of the company
In 2020, the company achieved operating income of 12.466 billion yuan, down 13.15% year-on-year. In the first quarter of 2021, the company's total operating income was 3.73 billion yuan, an increase of 62.71% year-on-year.
Chart 2: Grammy's operating income and year-on-year growth rate from 2011 to 2020 (100 million yuan, %)
In 2020, the company achieved a net profit attributable to the mother of 413 million yuan, down 43.90% year-on-year; net profit after deducting non-profit of 351 million yuan, down 50.33% year-on-year. In the first quarter of 2021, the company's net profit attributable to the mother was 276 million yuan, an increase of 150.42% year-on-year.
Chart 3: Grammy's attributable net profit and growth rate from 2011 to 2020 (100 million yuan, %)
From the perspective of business structure, in 2020, "new energy battery materials" is the main source of operating income of enterprises. Specifically, the operating income of "new energy battery materials" was 6.75 billion, accounting for 54.2% of revenue and gross profit margin of 19.9%.
Chart 4: Revenue structure of Grammy's main business by industry in 2020
In 2020, in the face of the huge challenges of the new crown epidemic, the company increased the production and sales of high-quality new generation products by optimizing the product structure and customer structure, shortened the receivables period of major customers, and increased the operating cash flow by 15.86% against the trend in the case of a 13.15% decline in sales scale and a 43.90% decline in net profit. The core business fully implements quality upgrading and scale expansion projects. Cobalt tetroxide sold 15,429 tonnes (more than 54% yoy),y/y) and ternary precursor material shipments reached 41,450 tonnes (down 30%), ranking among the top three in the global market, respectively.
Chart 5: The market share of major global ternary precursors in 2020
The company has implemented the construction of a new high-nickel precursor expansion project of 80,000 tons /year through non-public issuance, and by the end of 2020, the total production capacity of the company's ternary precursor has reached 130,000 tons/ year. Under the global industry market competition pattern, the company's ternary precursors have comprehensively transformed and upgraded from 5 series and 6 series products to high nickel products above 8 series, the shipment volume of high nickel products above 8 series accounts for more than 50%, and the export volume of NCA9 series ultra-high nickel products exceeds 18,000 tons, an increase of more than 35% year-on-year.
The upgrade of the ternary precursor product structure maintained the stability of the gross profit margin of the product, and the gross profit margin reached 24.03%, ranking among the best in the industry. Tribalt tetroxide materials have been comprehensively transformed into a new generation of doped high-voltage products, accounting for more than 50% of shipments, and completed the construction of scale expansion to 25,000 tons / year.
Third, waste battery recycling business analysis
1. Power battery recycling scale and revenue profitability
In 2018, the company was selected as the first batch of enterprises in the "New Energy Vehicle Waste Power Battery Comprehensive Utilization Industry Specification Conditions", first released the outstanding advantages of the bureau, and reached strategic cooperation with more than 280 vehicle manufacturers and battery factories such as Volkswagen, Daimler Benz, Toyota, Changan, Weilai, Weima, Xiaopeng and so on.
In 2020, the company's power battery recycling volume doubled compared with 2019, with a total recycling volume of more than 10,000 tons, more than 5,000 tons of resource-based power batteries, and 10,000 sets of cascade battery pack shipments, and a steady increase in market share. In 2020, the company's battery recycling business revenue was 0.93 billion yuan, a substantial increase of 175% year-on-year, achieving profitability.
Chart 6: Revenue and Gross Margin of Grammy Power Battery Recycling and Waste Resource Utilization by Business in 2020 (100 million yuan, %)
Source: Wind, Weber Consulting
2. Power battery recycling business development plan
In 2020, the company's subsidiaries Grammy (Wuhan) City Mining Group and Grammy (Wuxi) were selected into the second batch of enterprises listed in the "New Energy Vehicle Waste Power Battery Comprehensive Utilization Industry Specification Conditions". So far, among the 27 enterprises issued by the Ministry of Industry and Information Technology that meet the "Industry Specification Conditions for the Comprehensive Utilization of New Energy Vehicle Waste Power Batteries", Grimme occupies three of them, ranking first among the national enterprises (in 2018, the company's wholly-owned subsidiary Grimme (Jingmen) was selected as the first batch of enterprises that meet the "New Energy Vehicle Waste Power Battery Comprehensive Utilization Industry Specification Conditions").
Figure 7: The second batch of enterprises that meet the "New Energy Vehicle Waste Power Battery Comprehensive Utilization Industry Specification Conditions"
In 2020, the company actively built a "2 + N" waste battery recycling system, and took the lead in proposing the construction of a "ditch, river, and sea" type national recycling network system of primary terminal recycling, secondary recycling, tertiary dismantling and cascade utilization, and four-level recycling. Continue to build a decommissioned power battery recycling channel from the "capillary end" to the "trunk end", sign agreements with more than 280 automobile factories and battery factories around the world to establish a targeted recycling cooperation relationship for waste batteries, and successfully realize the market strategy of "signing 50% and recycling 30%".
The company's power battery recycling station is on the global layout pattern, and in accordance with the strategic goals of "leading China, leading the world" and "signing a contract and cooperating 50%, recycling 30%", the company has formed five core recycling bases and cascade utilization regional center bases in Wuhan, Tianjin, Wuxi, Henan and Shenzhen, and taken the lead in forming a pattern occupying the Yangtze River Delta, Pearl River Delta, Central China, Beijing-Tianjin-Hebei and Central Plains.
Chart 8: Cumulative decommissioning of power batteries in China from 2020 to 2027 and forecast (10,000 units)
The company will complete the construction of the POHANG power battery recycling base in South Korea in 2021, and actively lay out the power battery recycling factory in Europe, build a global power battery recycling industry system, and open up the gap with the industry. At present, the total design disassembly processing capacity is 450,000 sets / year, and actively build a global leader in the comprehensive utilization of decommissioned power batteries.
Fourth, the recycling business of electronic waste
In 2020, the company's six major e-waste parks have reached the scale of one million units, and the total dismantling volume has exceeded 8.02 million units/sets, an increase of 33% year-on-year, accounting for more than 10% of the national e-waste dismantling, making positive contributions to the company's post-epidemic revitalization.
Figure 9: Number and structure of waste electrical and electronic products dismantled in China in 2020 (10,000 units)
In 2020, the company will continue to optimize and adjust the industrial chain of the e-waste business in depth. It has formed an industrial chain of "fine dismantling of electronic waste - fine utilization of waste hardware - high-value utilization of waste plastics - comprehensive utilization of rare and precious and rare metals", innovatively realized the value-added model of fine treatment of electronic waste recycling in the industry, and realized the self-balancing of cash flow of electronic waste business.
In order to promote the e-waste business to become bigger and stronger, enhance the company's value, and promote business upgrading, in 2020, the company implemented the strategic measures of the independent listing of the spin-off e-waste business, and quickly completed the introduction of strategic investors and shareholding system transformation of the spin-off listing entity Jiangxi Green Circular Industry Co., Ltd. The IPO declaration has been accepted by the Shenzhen Stock Exchange on July 23, 2021, and is now in the second round of inquiry responses.
Chart 10: Greene's revolving operating income and net profit in 2018-2021 (million yuan, %)
The spin-off and listing of electronic waste is a major strategy for Grammy to achieve value enhancement and business upgrading, marking the successful implementation of the company's dual-track drive strategy of "urban mine + new energy materials".
Chart 11: Revenue and gross margin of Greene's recycling electronic waste dismantling business in 2018-2021 (million yuan, %)
5. Cobalt and tungsten recycling and recycling business
The company adopts waste cobalt tungsten resources, waste cemented carbide and other recycled high-tech cobalt tungsten products, and the ultra-fine cobalt powder produced has become a high-quality product recognized by the global cemented carbide industry. The company's ultra-fine cobalt powder has a market share of more than 40% and 50% in the international and domestic markets, ranking the forefront of the world industry.
Chart 12: Grammy's major customers for ultrafine cobalt powder
In 2020, the company accurately launched the innovation and upgrading of cobalt and tungsten core business, further consolidated the cobalt and tungsten resource recycling value chain of "cobalt and tungsten resource scrap recycling - resource recycling - material remanufacturing - product remanufacturing - product reuse", and greatly improved the profitability and global competitiveness of cobalt and tungsten core business.
In 2020, as the second largest shareholder, Ou Keyi (stock code: 688308) successfully landed on the Science and Technology Innovation Board, becoming the first company in the cemented carbide industry to land on the Science and Technology Innovation Board, marking the great success and value improvement of the company's cobalt and tungsten recycling and cemented carbide manufacturing business. At the same time, the company successfully implemented mixed reform on Zhejiang Dewei, which is controlled, and implemented the transformation with the entrepreneurial team as the controlling right, further activating the development momentum and further promoting the cemented carbide business to become bigger and stronger.
Chart 13: 2017-2020 Oukeyi operating income and net profit (million yuan)
In addition, the company introduced outstanding talents in the industry and established Jingmen Virtue Li CNC Material Co., Ltd., which opened the prelude to the value improvement project of tungsten resource recovery. It is planned to build a world-class CNC material manufacturing base for tungsten carbide through two years of innovation and upgrading, and greatly enhance the profitability and industrial value of the tungsten resource recovery industry chain.
Sixth, scrap car recycling business analysis
The company has built 7 of the world's most advanced scrap car treatment bases connecting China's north and south lines in Shenzhen, Wuhan, Tianjin, Henan and other places, and comprehensively built a complete resource industrial chain model of scrap cars of "recycling - dismantling - fine sorting - parts reengineering", including scrap car dismantling treatment, comprehensive crushing, comprehensive sorting of non-ferrous metal scrap, parts reengineering, forming a whole industry system of scrap car dismantling, crushing, sorting and parts reconstruction, and maximizing the implementation of harmless and resource disposal of scrapped cars. And fully put into operation, providing new impetus for the company's future business growth. At the same time, the company has also built a large market for urban mineral resources distribution in Jingmen, Xiantao, Hubei and Fengcheng, Jiangxi, providing raw material guarantee for the scrap car business.
In 2020, Grimme (Wuhan) City Mining Group was approved as a national ecological environment science popularization base and a Hubei Engineering Research Center for the recycling of scrapped vehicles (including new energy vehicles). The company actively carries out the vertical integration of urban mining yard business, implements the unified planning and collaborative management of 7 scrapped automobile park business, opens up the north-south large material yard coordination channel, and moves towards the rapid channel of the revitalization of renewable resources. The company actively cooperates with state-owned capital to promote the mixed reform of the scrap car business, continuously cultivate and develop it, and promote the profitability of scrapped cars to achieve 100 million-level profitability in the future.
Chart 14: China's vehicle and new energy vehicle ownership in 2016-2021 (10,000 units)
In 2020, the company established upstream and downstream recycling cooperation with large enterprises such as Dongfeng and Wuhan Iron and Steel, and under the serious impact of the epidemic in the main park of Wuhan, the comprehensive utilization of scrapped cars was 175,000 tons, about 87,500 vehicles, an increase of more than 16% year-on-year, and the recycling and treatment of scrapped cars accounted for more than 4% of China's total scrapped; the total number of scrapped cars recycled and dismantled exceeded 170,000.
Chart 15: The number and growth rate of end-of-life vehicle recycling in mainland China from 2016 to 2020 (10,000 units, %)
7. "Internet + classified recycling" model
As early as July 2015, Grimme has launched the first all-round O2O classification and recycling platform "Recycling Brother" in China, carried out "Internet + Classification Recycling", comprehensively improved the image and working mode of China's recycling army, used mobile PHONE APP, WeChat and website to realize the shared cycle lifestyle of residents, recycling brothers, governments and enterprises, and cracked the problem of urban garbage classification and recycling from the source of garbage classification.
The company has also carried out the construction of a large logistics network along the Yangtze River centered on Wuhan Xingang, a large recycling Yangtze River Economic Belt and a strategic operation network for scrap car recycling in the Beijing-Tianjin-Hebei urban economic circle centered on Tianjin, and built a large logistics system for river-sea intermodal transport through Wuhan New Port and Tianjin International Port, creating a business model and profit model of the scrapped automobile industry chain, and forming a strategic recycling system for scrapped vehicles.
For more comprehensive data and in-depth research on the garbage classification and treatment industry, please pay attention to the official website or public account of Weber Consulting to view the "2022 China Garbage Classification and Treatment Industry Special Investigation and In-depth Analysis Report" exclusively released by Weber Consulting.