China Re-Investment (600217): Renewable Resources Leader Expands to Enhance Industry and Company Potentials Underestimated

China Re-Investment (600217): Renewable Resources Leader Expands to Enhance Industry and Company Potentials Underestimated

Potential demand for investment in four machines and one brain: 5 times the market space in 4 years: The company is the leader of the internal waste electrical and electronic products processing industry and is the only listing platform of the central enterprise China Supply and Marketing Group.

At present, the “four machines and one brain” of the national subsidy standards have been clarified, and there is a clear gap between the amount of dismantling and the potential demand.

The potential demand for four machines and one brain is expected to be reachable in 2021.

700 million units, which is 0 in 2017.

About 5 times of 800 million units.

In addition, in the future, the new 9-type supplementary standards and the extension of the waste power product processing catalogue to other categories of products are expected to further open up the market space.

It is expected that in 2021, the new nine types of theoretical scrap will reach about six times the theoretical scrap of four machines and one brain.

Industry leaders form triple advantages of qualification, channel and capital.

1) Qualification: There are currently 5 batches of 109 companies in the industry that have obtained the qualification for dismantling waste power, and the number of existing filing companies will no longer increase, and the existing companies have qualification advantages.

2) Channels: The company’s current production capacity is 27.14 million units, and the scale of compliance dismantling is far ahead. It also relies on the strong channel network of major shareholders to regenerate its channel advantages.

China Renewables currently has 7 large regional recycling networks in 25 provinces, autonomous regions and municipalities across the country, with 3 regional distribution and trading markets, 70 decentralized sorting centers and more than 5,000 recycling outlets.

3) Funds: The company’s actual controller is the All-China Supply and Marketing Corporation, which has an AAA credit rating.


The 6 million asset securitization scale leads the industry and revitalizes existing assets.

After the major shareholders participated in the fixed increase, the asset-liability ratio was 69 in the first quarter of 2017.

8% excellence is expected to be 62 in 17 years.

0%, with significant funding advantages.

Three major advantages help profitability and increase market share.

1) Channel advantages bring optimization of product structure, increased bargaining power, and significantly improved profitability.

White power dismantling ratio is 4 from 13 years.

5% rose to 25% in 17 years. Under the background of supplementary downward adjustment, the actual profit of a single unit in 17 years still increased to 28 yuan per unit, an increase of 21%.

2) Utilize the advantages of capital to spend subsidies, and the 18-year replenishment and renewal have significantly improved cash flow.

18Q3 net operating cash flow of the company3.

1.9 billion, a year-on-year increase of 159%.

3) Increased market share and large profit elasticity due to capacity load.

The company actively seized the opportunity to clear out the backward production capacity to realize an alternative solution, with a market share of 21 in 17 years.

8%, an increase of 4 per year.

2 averages.

In 2017, the company’s capacity utilization rate was 65%. By supplementing and accelerating, the optimization of the product structure will lead to an increase in dismantling volume and increase the capacity utilization rate, which may bring about poor profit expectations.

Backed by the head office of supply and marketing, the strength of shareholders has increased.

The company’s actual controller, China Supply and Marketing Group, is a company affiliated to the National Supply and Marketing Cooperative Association. Its subsidiaries, China Recycling and China Recycling Resources, are the largest professional renewable resource recycling companies and industry leaders. Their main business is the recycling of renewable resources, including scrap steel, Waste paper, waste colored, waste plastic and other businesses.

In the 17 years, Regeneration achieved an operating income of US $ 15 billion, which is 6 of the 17 years of revenue of the listed company Reinsurance.

4 times.

Profit forecast and investment rating: The company is backed by China Supply and Marketing Group, which has three advantages: qualification, channel and capital.

Taking into account the sustainable growth of the industry space and the company’s leading core advantages brought by the company’s three core competitiveness, the company’s endogenous growth is expected to achieve net return to motherhood in 2018/19/20Profit 3.



63 trillion, EPS is 0.23/0.


33 yuan, corresponding to PE is 26/21/18 times, the first coverage is given a “buy” rating.

Risk reminder: The maximum production capacity is not up to expectations, the replenishment fund is in arrears, the policy is not up to expectations, and industry competition is intensifying.