Original title: Waste classification industrialization is in the ascendant, more than 80 listed companies lead the new track
In the garbage sorting industry for 10 years, Chen Chenggang, the person in charge of Dongguan Tongri Environmental Protection Technology Co., Ltd., finally ushered in the market explosion period.
“Our company mainly deals with food waste disposal. Last year, the entire market was relatively hot. This year, with the introduction of favorable policies, we have received more orders.” Chen Chenggang introduced to a reporter from 21st Century Business Herald.
A few days ago, the National Development and Reform Commission issued the “Fourteenth Five-Year Plan for Circular Economy Development”, which has formulated the overall goals and roadmap for the development of my country’s circular economy during the “14th Five-Year Plan” period. This is of great significance for accelerating the efficient use and recycling of renewable resources.
With the help of favorable policies, the marketization of waste sorting will also enter the fast lane. On the track of the waste sorting industry, it has attracted the influx of many capitals and companies, and an industry feast for waste sorting and recycling has begun.
In the first quarter of 2021, a total of more than 30 listed companies in waste sorting concept stocks doubled their performance. Among them, Beihua shares topped the list with a year-on-year growth of 1190.06% in net profit for the first quarter of 2021. Three-dimensional Engineering, Huahong Technology, Tianqi, Zhongchuang Environmental Protection, Hyundai Investment, and Jianlang Hardware’s net profit in the first quarter increased by more than 400% year-on-year.
The market size is expected to exceed 1.1 trillion this year
Chen Chenggang has been immersed in the waste sorting and processing industry for many years. The Tongri Environmental Protection, which he is in charge, has mastered the organic waste treatment technology as early as 10 years ago, so he took advantage of the trend to cut into the field of kitchen waste treatment.
“In the past two years, the industry has developed faster and faster, and our orders have also steadily increased. There are currently more than 10 waste operations and treatment pilots in Dongguan.” Chen Chenggang introduced.
Data shows that the market size of my country’s renewable resources in 2018 has reached 860 billion yuan, and by the end of 2021, it is expected to exceed 1.1 trillion yuan. This market is growing rapidly at a rate of more than 100 billion yuan per year.
“Garbage is a misplaced resource. If sorted and processed, some garbage can be turned into’urban minerals’.” Zhou Yongzhang, director of the Earth Environment and Earth Resources Research Center of Sun Yat-sen University, said vividly. He believes that the problem of “garbage siege” brought about by urbanization and industrialization will also be resolved with the improvement of urban governance and the advancement of industrial technology.
On May 13, the National Development and Reform Commission and the Ministry of Housing and Urban-Rural Development jointly issued the “Fourteenth Five-Year Plan for Urban Domestic Waste Classification and Treatment Facilities Development Plan”. By the end of 2025, the utilization rate of the national urban domestic waste resource utilization will reach about 60%, and the national domestic waste classification The collection and transportation capacity reaches about 700,000 tons/day, and the urban domestic waste incineration capacity accounts for about 65%.
A few days ago, the National Development and Reform Commission issued the “14th Five-Year” Circular Economy Development Plan. By 2025, various indicators of my country’s circular economy industry will be greatly improved, and the output value of the resource recycling industry will reach 5 trillion yuan.
In Zhou Yongzhang’s view, the state will pay more and more attention to the circular economy, and the promotion will be greater in the future. This will guide the development of front-end manufacturing, mid-end collection and transportation, and back-end disposal of waste sorting.
Essence Securities has a research report that estimates that by 2020, the national market size of waste sorting services will exceed 61 billion yuan. During the “Thirteenth Five-Year Plan” period, the investment market for kitchen waste treatment facilities reached 100 billion yuan.
Listed companies have long been keenly aware of the new business opportunities brought by garbage classification. The 21st Century Business Herald found that there are currently more than 80 garbage classification stocks belonging to A-shares. Among them, Jianlang Hardware, Shenzhen Energy, Weiming Environmental Protection, Infore Environmental, Beijing Capital, Hanlan Environmental, Sanfeng Environmental, Shanghai Environmental, etc. The market value has exceeded 10 billion yuan.
Chen Chenggang introduced to the 21st Century Business Herald reporter that with the development of the industry, there are more and more technical paths for waste sorting and disposal. Currently, there are mainly landfills, composting, incineration, pyrolysis, and biochemical processes. Although the methods are different, they are harmless. Globalization, resource utilization, and reduction are the common direction.
With the help of capital, some companies have rapidly grown into technological “upstarts” in the field of waste sorting. Xiaohuanggou Environmental Protection Technology Co., Ltd. is one of them. Little Yellow Dog is a leading enterprise in the field of domestic waste sorting and recycling. Its main business is to provide residents with multi-scene waste sorting and recycling services-through the three business models of intelligent waste sorting and recycling machines, convenient delivery points, and door-to-door recycling. The classification service radius extends to the last 1 meter.
The person in charge of the Little Yellow Dog Environmental Technology Group said that what Little Yellow Dog has to do is to smooth the chain of domestic waste from generation to disposal, collection, transportation, and treatment, and realize the whole life cycle management of waste classification. Up to now, the little yellow dog has settled in more than 43 cities across the country and has settled in nearly 10,000 communities, covering a total of more than 24 million residents.
Profit model is still a problem
Waste sorting is often combined with public welfare, and if large-scale market operations are achieved, corporate profitability is an inevitable topic. Despite policy support and the market is optimistic, there is still a long way to go to truly “dig money” from urban garbage.
Chen Chenggang felt deeply about this. He observed that, “In this industry, most of the current orders come from government departments. If there is no financial subsidy, almost no company can make a profit in the market.”
In Chen Chenggang’s view, at present, waste sorting and treatment is only in the pilot stage in many areas of the country. If it is to be spread and promoted on a large scale, a large amount of capital investment will inevitably be required. “If you want to ensure sustainable operation, you need strong financial resources, otherwise it will be unsustainable.”
So, what is the profitability of the company? Mr. Liu is the person in charge of a garbage sorting and recycling company. He told a reporter from 21st Century Business Herald that taking a pilot community as an example, the company’s investment in a year is more than 300,000 yuan, excluding labor costs, equipment investment, freight, etc. The company’s profitability is not very high.
Mr. Liu also said frankly, “If there is a lack of profitability and government subsidies, it will be difficult to promote waste sorting on a large scale.”
However, many domestic enterprises are also exploring new business models, and the “Internet + garbage classification” model is regarded as a new “outlet.”
In this field, the Little Yellow Dog Company is at the forefront of the country. At the beginning of its establishment, Xiaohuanggou launched an intelligent waste sorting and recycling terminal trading platform, hoping to connect various ports in the waste sorting and recycling industry, and gradually realize the integration of “sorted recycling, sorted and transported, fine decomposition, regenerated materials processing, and regenerated materials). “Trade” is a closed ecosystem.
The main idea of this model is to realize the real-time interaction between hardware, system backend, and user end by virtue of the “Internet + garbage classification” model, and the profit space exists in this closed-loop ecological chain. In addition to the revenue of recycled materials, the main goal is to realize profit through the later big data.
Experts in the industry believe that the classification and treatment of waste is more complicated, and it is not suitable for full marketization at present, but it is not realistic to push all of it to the government. If garbage sorting is to be promoted on a large scale, the government, enterprises, and community residents need to jointly promote it, and there must be a long-term mechanism to ensure the formation and sustainable development of the industrial chain.
For Chen Chenggang, the waste sorting industry is ushering in a golden period of development. As more and more companies enter the market, he also feels the pressure of competition. “In the future, we will continue to improve process technology and products to increase market competitiveness and look forward to the outbreak of this market.”
(Author: Yu Changhuan, Editor: Zhou Shangqi)