Huaxin Lvyuan Environmental Protection Co., Ltd. (hereinafter referred to as "Huaxin Environmental Protection"), a high-tech environmental protection enterprise that uses and processes the disposal business, timely grasped the market development opportunities and continuously expanded its business scale. Its main businesses include the disassembly of electronic waste, the disassembly of end-of-life vehicles, the recycling and reuse of waste electronic equipment and the disposal of hazardous waste
Etc. For many years, Huaxin Environmental Protection has developed many advantages such as recycling channel, qualification, location, industrial chain, technology and so on. At the same time, Huaxin Environmental Protection continued to carry out technological innovation, and combined with the "Internet plus" technology to improve the efficiency of disassembly and management, becoming its core competitiveness in the industry. In addition, Huaxinhuan
We will actively extend the industrial chain and enter the field of hazardous waste recycling on the basis of existing hazardous waste treatment. Huaxin Environmental Protection's four comprehensive utilization projects of hazardous waste resources are expected to be completed and put into operation from 2022 to 2023, which is its future development direction.
1、 The tide of "circular economy" strikes the industry to meet the opportunity, and the supply of raw materials is sufficient and the downstream demand is strong
In recent years, in the context of the "dual carbon" strategy, the development of circular economy has become an important way to achieve the dual carbon goal. According to the calculation of China Circular Economy Association, the comprehensive contribution rate of circular economy to domestic carbon emission reduction during the "13th Five-Year Plan" period exceeded 25%.
In July 2021, the National Development and Reform Commission issued the "Fourteenth Five-Year Plan" for the development of circular economy, focusing on recycling and recycling, and deploying five key projects and six key actions in the field of circular economy during the Fourteenth Five-Year Plan period, including the construction of the recycling system of urban waste materials, and the recycling and upgrading of waste electrical and electronic products
The promotion of the life-cycle management of the use of motor vehicles and automobiles highlights the significance of the electronic waste dismantling business and the scrapped motor vehicle dismantling business to the circular economy.
With the increasing awareness of national environmental protection and the policy support of the state to vigorously promote the circular economy, the solid waste treatment industry, as an important part of the circular economy, has ushered in broad development space and rare development opportunities.
It is worth mentioning that the solid waste treatment industry is not only in a good policy environment, but also its upstream and downstream industries continue to develop, providing sufficient raw materials and large and stable market demand for the development of the solid waste treatment industry.
In the upstream industry, the rapid growth of domestic economy and the continuous improvement of residents' living standards have led to the rapid development of the electrical and electronic industry, and the rapid growth of domestic motor vehicle ownership.
First of all, the number of "four machines and one brain" (TV sets, microcomputers, washing machines, refrigerators and air conditioners) of domestic residents has continued to grow. The theoretical scrapping cycle of "four machines and one brain" is usually 8-10 years. Therefore, the scrapped electrical and electronic products in the future are expected to maintain the growth momentum.
According to the data of China's Waste Electrical and Electronic Products Recycling and Comprehensive Utilization Industry White Paper 2021, in 2021, the number of domestic color TV households will be 690 million, 600 million refrigerators, 570 million washing machines, 720 million room air conditioners and 320 million microcomputers.
According to the data of the Ministry of Public Security, in 2017-2021, the number of motor vehicles owned by domestic residents was 310 million, 327 million, 348 million, 372 million and 395 million respectively. By the end of September 2022, the number of motor vehicles in China has reached 412 million.
According to the data of the Development Report of China's Renewable Resources Recovery Industry issued by the Ministry of Commerce and the China Material Recycling Association, the total value of domestic renewable resources recovery in 2017-2021 was 755.1 billion yuan, 868.4 billion yuan, 900.4 billion yuan, 1013.7 billion yuan and 1369.5 billion yuan respectively, showing a rising trend, with a year-on-year increase of 35.1% in 2021.
In terms of downstream market demand, the domestic national economy and gross industrial product have maintained a steady growth momentum in recent years. Manufacturing enterprises need a large number of basic materials such as metals and plastics in the production process. The renewable materials obtained from the recycling of solid waste are used as substitutes for basic materials, with relatively low prices and large and stable market demand
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At the same time, waste electronic equipment recycling products are widely used in data centers and start-ups. They are substitutes for new electronic equipment with high cost performance and large and stable market demand.
To sum up, in recent years, in the context of the "double carbon" strategy, the country has paid more attention to environmental protection and circular economy, and the solid waste treatment industry has ushered in broad development space and rare development opportunities. At the same time, the number of domestic electrical and electronic products and motor vehicles keeps growing and the base is huge, bringing sufficient raw materials; manufacturing
The Internet industry has developed steadily, and the market demand for disassembled products and used electronic equipment is large and stable.
2、 The recycling channels of raw materials are diversified and stable, and the three major disassembly bases have superior geographical conditions
Due to the high recycling value of waste household appliances, electronic products and end-of-life vehicles, and the characteristics of front-end collection such as scattered distribution, high frequency and small single output, front-end collection has become an important link in the development of Huaxin's environmental protection business and an important factor limiting its business scale.
After years of business accumulation, Huaxin Environmental Protection has established diversified and stable solid waste recycling channels, forming certain channel advantages. Huaxin Environmental Protection has established long-term and stable cooperative relations with many large enterprises, 4S stores, government agencies, public institutions and large individual suppliers in the region.
In terms of the recycling of electronic waste, Huaxin Environmental Protection has established a long-term and stable cooperative relationship with the electronic waste recyclers in the region and surrounding areas. By signing the recycling cooperation agreement, it has ensured the stability of the source of goods to a certain extent. Huaxin Environmental Protection is the designated environmental protection agency directly under the central government and Beijing municipal administrative institutions
The acquirer, the subsidiary Yunnan Huazai, is the designated underwriter for the centralized destruction of discarded and discarded office automation equipment and storage media identified by the Yunnan Provincial Bureau of Confidentiality.
In terms of recycling of end-of-life vehicles, Huaxin Environmental Protection mainly recycles end-of-life vehicles from individuals, administrative institutions, transportation companies, car repair shops, 4S stores and vehicle factories.
In terms of recycling of waste electronic equipment, Huaxin Environmental Protection mainly provides services to Lenovo (Beijing) Information Technology Co., Ltd., Alibaba (China) Co., Ltd., Beijing Sogou Technology Development Co., Ltd., Beijing ByteDance Network Technology Co., Ltd., China Mobile Communications Co., Ltd. and other large Internet technology companies and financial companies
Recycle electronic equipment such as servers and computers, electronic components and other electronic office equipment that have reached the predetermined service life or have been scrapped in advance.
It is worth mentioning that the solid waste treatment industry has regional characteristics, so the location conditions are particularly important for the solid waste treatment industry.
As the backbone enterprise of Beijing's national "urban mineral" demonstration base, Beijing's environmental education base and science popularization base, Huaxin Environmental Protection is headquartered in Beijing, carrying out the dismantling business of electronic waste and end-of-life vehicles and the recycling and reuse business of waste electronic equipment. It is three in Beijing (one of which has stopped the business)
One of the enterprises listed in the subsidy list of waste electrical and electronic products treatment fund.
Beijing has a developed economy, a high average consumption level of residents, and a high number of electric and electronic products and cars. For example, the number of cars in Beijing by the end of 2020 is 6.57 million, ranking first in the country, providing sufficient guarantee for the recycling of raw materials. In addition, Beijing is close to the Beijing-Tianjin-Hebei Industrial Belt and the largest circular economy in the north of China
The "Tianjin Ziya Environmental Protection Industrial Park" in the park has a strong demand for disassembled products from surrounding enterprises, providing convenient transportation conditions and sufficient market demand for the sale of disassembled products.
At the same time, Huaxin Environmental Protection has two subsidiaries, Yunnan Huazai and Inner Mongolia Huaxin, which are engaged in the electronic waste disassembly business. Yunnan Huazai is located in Kunming City, and is one of the two enterprises in Yunnan Province with the qualification to dispose of waste electrical and electronic products; Inner Mongolia Huaxin, located in Ulanqab City, is one of the three enterprises in Inner Mongolia Autonomous Region with waste electrical appliances
One of the enterprises qualified for processing electronic products. The layout of subsidiaries has enhanced the scope of business radiation and broadened the recycling and sales channels of Huaxin Environmental Protection.
In addition, Huaxin Environmental Protection's hazardous waste treatment business is located in Ulanqab City, Inner Mongolia Autonomous Region, which is located in the central part of Inner Mongolia, close to the northern part of Shanxi Province. The local land resources are rich and the transportation is convenient, which is suitable for hazardous waste treatment business. In addition, there is a huge gap in the production and treatment of hazardous waste in Inner Mongolia Autonomous Region. The market
The space is huge. Sufficient raw materials and superior location conditions are important guarantees for the healthy and sustainable development of Huaxin Environmental Protection. According to the prospectus, from 2019 to 2021, Huaxin Environmental Protection's operating revenue was 583 million yuan, 570 million yuan and 782 million yuan respectively, and its net profit was 86 million yuan, 132 million yuan and 156 million yuan respectively.
By January-June 2022, Huaxin Environmental Protection achieved operating revenue of 377 million yuan and net profit of 68 million yuan. The decline in performance was mainly due to the impact of the COVID-19, the storage of raw materials for the project of extracting precious metals, and the failure to sell waste three-way catalysts.
3、 The whole process of solid waste treatment has been completed in the industrial chain, and the income of hazardous waste disposal business has soared
The solid waste treatment industry has a threshold of entry for its sub-sectors. Obtaining corresponding qualifications is a prerequisite for entering the industry. There are qualification barriers in the industry.
Huaxin Environmental Protection has been deeply engaged in the solid waste treatment industry for many years. It has the qualifications for the dismantling of electronic waste, the dismantling of end-of-life vehicles and the collection, storage and disposal of 36 categories of hazardous waste. It has passed the ISO9001: 2015 quality management system certification and R2 certification, and has entered the list of enterprises subsidized by the waste electrical and electronic products treatment fund
Some qualifications cover multiple fields and can well meet customers' needs for products and services.
At present, Huaxin Environmental Protection has formed a recycling and resource-based industrial chain that focuses on the dismantling of electronic waste, and the dismantling of end-of-life vehicles, the recycling and reuse of waste electronic equipment and the landfill of hazardous waste.
In the process of dismantling electronic waste and end-of-life vehicles, hazardous wastes such as waste circuit boards, cone glass, fluorescent powder, mercury-containing lamp tubes and waste mineral oil will be generated. Such hazardous wastes should be disposed by qualified enterprises. Huaxin Environmental Protection has the corresponding qualification for hazardous waste treatment, and can use phosphor and mercury lamp
The hazardous wastes such as pipes are handed over to its internal hazardous waste treatment subsidiary for disposal, so as to realize the whole process of solid waste treatment from recycling to recycling and final disposal.
The relatively complete business chain in the field of solid waste treatment enables Huaxin Environmental Protection to better play the synergy between businesses, providing support and guarantee for the construction of multiple comprehensive utilization projects of hazardous waste resources in the next step.
In recent years, the businesses of all sectors of Huaxin Environmental Protection have continued to develop, and the income of hazardous waste disposal business has increased rapidly.
In the field of electronic waste disassembly, Huaxin Environmental Protection obtains the products of disassembly by disassembling electronic waste, including recycled materials such as metals, plastics, glass and waste parts, as well as hazardous waste available for sale. The revenue generated from the electronic waste disassembly business accounts for more than 50% of the main business income.
According to the prospectus, from 2019 to 2021 and from January to June 2022, Huaxin Environmental Protection's business income from dismantling electronic waste was 358 million yuan, 348 million yuan, 429 million yuan and 224 million yuan, accounting for 62.68%, 62.19%, 55.60% and 60.14% of the current main business income.
In terms of hazardous waste disposal services, Huaxin Environmental Protection currently treats hazardous waste in a safe landfill. The main categories of hazardous waste disposal mainly include incineration disposal residues, fly ash, organic solvent waste, organic resin waste, mercury-containing waste and industrial sludge.
According to the prospectus, from 2019 to 2021 and from January to June 2022, Huaxin Environmental Protection's revenue from hazardous waste disposal services was 34 million yuan, 119 million yuan, 152 million yuan and 91 million yuan, respectively, with an average CAGR of 110.42% in 2019 to 2021.
In short, Huaxin Environmental Protection has industry qualifications covering multiple fields, forming a relatively complete business chain, which can better play the synergy between businesses. At the same time, the core business of Huaxin Environmental Protection, the revenue from the electronic waste dismantling sector, has shown a steady growth trend, and the revenue from hazardous waste disposal services has increased rapidly.
4、 Core technology enables production and operation, and "Internet plus" improves sales and disassembly efficiency
Since its establishment, Huaxin Environmental Protection has always focused on the recycling and treatment and disposal of solid waste, continued to promote scientific and technological innovation, and formed three core technologies in the field of recycling and disposal of solid waste, including household appliance breaking and dismantling technology, scrapped vehicle dismantling technology, and hazardous waste stabilization/solidification and landfill technology.
In terms of electronic waste disassembly business, Huaxin Environmental Protection has formed advanced technologies such as large-scale household appliance disassembly and treatment technology, silver-carrying activated carbon mercury removal technology, automatic waste circuit board tin removal technology, wet dust removal technology applicable to waste refrigerator processing line, waste refrigerator plastic online sorting and recycling technology. In the scrapped motor vehicle dismantling business
At present, Huaxin Environmental Protection has formed "assembly line" type flexible scrapped vehicle disassembly process and other advanced technology processes. In terms of hazardous waste disposal business, Huaxin Environmental Protection has formed advanced technology processes such as distributed dry-type deodorization equipment, hazardous waste landfill solidification and compatibility technology.
The above advanced technologies are conducive to Huaxin Environmental Protection to improve production and operation efficiency, reduce costs, reduce pollutant emissions, and ensure smooth operation.
At the same time, Huaxin Environmental Protection keeps exploring the path of "industry+Internet", seeking innovation and change. Relying on its own customer resources in the renewable resources industry accumulated for many years, Huaxin Environmental Protection has independently developed a bidding platform for goods sales, enabling customers to bid through the "Huaxin Environmental Protection Online" on mobile official account, which reduces the bargaining ratio
Price process, improve sales efficiency and price.
Innovative bidding transaction mode, fair, fair and open bidding environment, clear and simple business process, seamless connection between offline and online, and barrier-free information communication have improved the sales value of renewable resources products, brought the enthusiasm and initiative of both parties into play, and saved a lot of time and communication costs for both parties.
According to the prospectus, the sales expense rates of Huaxin Environmental Protection were 0.38%, 0.66%, 0.62% and 0.48% respectively in 2019 - 2021 and January - June 2022. During the same period, Huaxin Environmental Protection's comparable companies in the same industry, including Dongjiang Environmental Protection, Green Cycle, Zhongrezihuan, Enlightening Environment, Earth Ocean, Beyond Environmental Protection, Feinan Resources, Zhenjiang solid waste sales
The average cost rate is 1.95%, 1.62%, 2.06% and 3.59% respectively.
In addition, through the implementation of "Internet plus technology", Huaxin Environmental Protection has realized the whole process of Internet based recycling of end-of-life vehicles, dismantling of end-of-life vehicles, and sales of second-hand auto parts, effectively enhancing the delicacy of internal control of the end-of-life vehicle dismantling business of Huaxin Environmental Protection and the rapidity of internal information transmission.
In terms of the recycling of end-of-life vehicles, end-of-life vehicle owners make an appointment for scrapping through the WeChat official account of Huaxin Environmental Protection, "Huaxin Kaiye Dismantling" or the WeChat applet "Auto Scrap Expert", to achieve the whole process of contactless vehicle recycling. At the dismantling stage of end-of-life vehicles, after the vehicles enter the factory, Huaxin Environmental Protection uses its internal management software to enter
Carry out precise control to make the whole process of disassembly of each vehicle visible and controllable. In terms of sales of used auto parts, Huaxin Environmental Protection has realized the traceability of used auto parts by developing the WeChat widget "Auto Parts Taobao", provided users with accurate matching of models and used auto parts information, and completed online order and payment. "Mutual
"Internet+" has played an important role and significance in the external sales and internal management of Huaxin environmental protection products.
In general, since its establishment, Huaxin Environmental Protection has continuously carried out technological innovation and combined it with the "Internet plus" technology to improve the efficiency of sales, disassembly and management, which has become its core competitiveness in the industry.
5、 Raise funds to improve the capacity of hazardous waste disposal and refrigerator disassembly, extend the industrial chain and enter the field of hazardous waste recycling
For this listing, Huaxin Environmental Protection plans to raise 510 million yuan for "hazardous waste disposal center change project", "30000 t/a incineration disposal project", "refrigerator line physical disassembly, classified collection, reconstruction and expansion project", and "supplementary working capital".
Among them, the "hazardous waste disposal center change project" is proposed to raise 200 million yuan, with a total investment of 230 million yuan. On the reserved land for the construction of the hazardous waste disposal center project in Huaxin, Inner Mongolia, the original flexible landfill in the sixth zone will be changed into a rigid landfill. After the change, the disposal of hazardous waste in the new rigid landfill increased from 32 to 36
To further improve the market competitiveness of Huaxin Environmental Protection in the field of hazardous waste disposal business.
It is worth mentioning that according to statistics, there are more than 1500 enterprises with hazardous waste treatment qualification in the country, of which about 90% of enterprises have less than 10 types of hazardous waste that can be disposed of with permission, while only 1% can handle more than 25 types of hazardous waste.
The "30000 t/a incineration disposal project" is proposed to raise 85 million yuan, with a total investment of 94.5 million yuan. Through incineration disposal, the reduction and harmless treatment of hazardous waste will be realized, which will further improve the industrial chain of Huaxin Environmental Protection's hazardous waste disposal business, enrich the types of hazardous waste disposal, and improve the disposal efficiency and disposal economy of hazardous waste
To enhance profitability and market competitiveness. The "refrigerator line physical disassembly, classified collection, reconstruction and expansion project" is proposed to raise 25 million yuan, with a total investment of 68.75 million yuan, to upgrade and transform the Yunnan Huazai refrigerator disassembly line, improve the efficiency of refrigerator disassembly and the precision of disassembly, and expand the capacity of Yunnan Huazai refrigerator disassembly
Business scale to enhance the market competitiveness of Yunnan Huare. The project is a further expansion of the existing business of Huaxin Environmental Protection. After the raised investment project is put into operation, it will increase the overall scale of Huaxin Environmental Protection, which is conducive to further play its advantages in technology, products, customers, brands and management resources, and realize the integration and synergy of Huaxin environmental protection business
We should strengthen its ability to resist the risk of market changes, market competitiveness and sustainable development.
At the same time, based on the existing hazardous waste disposal business, Huaxin Environmental Protection actively expands hazardous waste recycling projects, which is the direction of Huaxin Environmental Protection's future development. At present, Huaxin Environmental Protection has four comprehensive utilization projects of hazardous waste resources, which are expected to be completed and put into operation from 2022 to 2023.
The "fly ash desalination and industrial waste salt comprehensive utilization project" aims at the problem of fly ash desalination caused by waste incineration/hazardous waste incineration. Huaxin Environmental Protection plans to build a comprehensive utilization project of hazardous waste, which can successfully separate sodium salt and potassium salt contained in fly ash to obtain industrial salt raw materials. The project has started infrastructure construction and the main equipment has begun customization. It is estimated that
It will be put into operation in 2022.
The "Precious Metal and Copper Material Recycling Project" is aimed at Huaxin Environmental Protection and the processing of electronic waste and scrap cars in the same industry, which generate a large number of waste electronic circuit boards, waste ternary catalysts and copper materials. Huaxin Environmental Protection plans to build a precious metal and copper material recycling project, including crude copper, waste PCB board, crude gold (precious metal alloy
Gold placer), waste industrial catalyst and waste ternary catalyst are used as raw materials for crude copper smelting and precious metal refining. At present, the phase I of the project is in the acceptance stage of the spent three-way catalyst and industrial catalyst, and is expected to be put into operation in 2022.
"5500 tons/year fluorine-containing hazardous waste resources comprehensive utilization project" carries out comprehensive utilization of resources of high-boiling substances (hazardous waste) produced by fluorine chemical enterprises, separates various components and uses them as raw materials to produce high-value-added fluorine fine chemicals. The product can be used as a new type of electrolyte for lithium-ion batteries, which can improve the performance of power batteries
Low temperature performance, low flammability, has a good market prospect. The project is planned to be put into production in 2023.
The "Comprehensive Utilization Project of Cobalt-containing Hazardous Waste Resources" uses advanced ion exchange technology to efficiently extract cobalt from smelting waste slag containing less than 2% cobalt (currently, the cobalt-containing smelting waste slag with this content has no extraction value). The project is planned to be put into operation in 2023.
After the above projects are put into operation, they can realize the comprehensive utilization of waste circuit boards, waste copper, precious metal alloys and fly ash hazardous wastes, and enhance the comprehensive competitive advantage of Huaxin Environmental Protection. At the same time, the completion and operation of the above projects are in line with the existing hazardous waste landfill disposal business of Huaxin Environmental Protection and the "30000 t/a incineration disposal project"
Current business complements and cooperates.
The incineration, disposal and comprehensive utilization of hazardous waste in the future will continue to bring new content and new opportunities to Huaxin Environmental Protection's resource cycle development strategy, and lay a solid technical, practical and industrial foundation for its stable and sustainable development in the future.