Automobile scrapping meets the 100 billion level market: layout of listed companies

category:Finance
 Automobile scrapping meets the 100 billion level market: layout of listed companies


The detailed rules comprehensively regulate the industry in the direction of clarifying responsibilities, identifying qualifications, emphasizing supervision, and cracking down on illegal activities. According to the detailed rules, the State implements a qualification system for recycling and dismantling enterprises. Without qualification certification, no unit or individual shall engage in the recycling and dismantling of scrapped motor vehicles. The State encourages the motor vehicle production enterprises to engage in the recycling and dismantling of scrapped motor vehicles. The motor vehicle production enterprises shall bear the producer responsibility in accordance with the relevant provisions of the state, and shall provide the recycling and dismantling enterprises with relevant technical information such as the dismantling instruction manual for scrapped motor vehicles.

Zhang Ying, Secretary General of scrapped vehicles branch of China Renewable Resources Recycling Association, analyzed to China Securities Journal that the implementation of the detailed rules will further enhance the overall level of the scrapped vehicle dismantling industry and promote the healthy and stable development of the industry. Among them, to improve the enterprise information mode, recycling and dismantling enterprises should establish sales accounts of scrapped motor vehicle parts, truthfully record the quantity, model and flow direction of the five major assemblies of scrapped motor vehicles, and make unified management regulations on the sales of recycled parts of scrapped motor vehicles. In addition, new management regulations on the dismantling of new energy vehicles have been added, especially the identification code of scrapped new energy vehicles and the code, quantity, model and flow direction of traction battery shall be recorded. The hazardous waste management of scrapped motor vehicles has been strengthened. For example, the disassembled tail gas post-treatment devices and hazardous wastes shall be truthfully recorded and handed over to qualified enterprises for dismantling and disposal, and shall not be sold or resold to other enterprises.

According to statistics, in 2019, there are 260 million cars in China, 9.1 million vehicles are theoretically scrapped, and 1.95 million vehicles are actually recovered, with the recovery rate of only 0.75%. The main reason is that there are multiple constraints in the traditional scrapping and recycling regulations. Some of the scrapped vehicles flow into the second-hand car market or black market transaction, causing serious environmental pollution and traffic safety risks. Zhang Ying said that with the gradual improvement of the management measures and relevant laws and regulations, the scrapping of motor vehicles will gradually become standardized, and the industry may usher in accelerated reshuffle. In the process of industrial upgrading in the future, special attention should be paid to the overall ability and standard level of enterprises. Some small-scale, substandard and insufficient dismantling capacity enterprises will be eliminated.

Distribution of listed companies

A number of listed companies set up the field of automobile dismantling and scrapping. On August 6, edia environment said on the interactive platform of Shenzhen stock exchange that there were three subsidiaries of the company engaged in scrapped vehicle dismantling business, with about 14500 units to be disassembled in 2019.

In response to investors recently, greenway said that the implementation rules will promote the marketization, specialization and intensive development of the ELV industry. The company has built scrapped vehicle processing bases in Wuhan, Tianjin, Jiangxi, Henan and Xiantao, covering Beijing, Tianjin, Hebei, Wuhan and Central Plains, with an annual processing capacity of more than 300000 vehicles, and has comprehensively built a complete resource-based industrial chain mode of recycling dismantling coarse sorting fine sorting parts recycling. According to the feasibility study report, Wuhan and Tianjin ELV projects are expected to achieve an annual sales revenue of 1.5 billion yuan and an annual profit of nearly 200 million yuan.

Tianqi shares said that the company has laid out the whole auto dismantling industry, and the business is expected to become the main growth point of the company in the future. The company mainly arranges the automobile dismantling industry by means of investment and merger, owns the shares of automobile dismantling equipment manufacturer Lidi, occupying a leading position in the field of domestic high-power crusher; in the field of remanufacturing, the company acquired Guangzhou ouluide. According to the companys announcement, the company is the only one in South China approved by the Ministry of industry and information technology remanufacturing pilot enterprises.

Haitong Securities analyst Wu Jie pointed out that with the implementation of the detailed rules, a new policy system for scrapped vehicle dismantling industry has been formed. As the five major assemblies (engine assembly, steering gear assembly, transmission assembly, front and rear axle, frame) can be recycled directly, the profit of dismantling enterprises is expected to increase. Opening up the industry access will attract new investors, and the demand for automobile dismantling equipment is expected to increase. The implementation rules force the stock license to meet the requirements of the new technical specification within two years. Anxin Securities pointed out that the policy of recycling and dismantling ELVs continued to be implemented, and forward-looking equipment companies began to expand the industrial chain and extend to the core links such as recycling, dismantling and remanufacturing. At the same time, allowing the five major assemblies with remanufacturing conditions to be sold to enterprises with remanufacturing capacity is conducive to enhancing the profitability of automobile dismantling enterprises, and the industry prosperity is expected to be better. Source: Chen Hequn, editor in charge of China Securities Journal_ NB12679

Haitong Securities analyst Wu Jie pointed out that with the implementation of the detailed rules, a new policy system for scrapped vehicle dismantling industry has been formed. As the five major assemblies (engine assembly, steering gear assembly, transmission assembly, front and rear axle, frame) can be recycled directly, the profit of dismantling enterprises is expected to increase. Opening up the industry access will attract new investors, and the demand for automobile dismantling equipment is expected to increase. The implementation rules force the stock license to meet the requirements of the new technical specification within two years.

Anxin Securities pointed out that the policy of recycling and dismantling ELVs continued to be implemented, and forward-looking equipment companies began to expand the industrial chain and extend to the core links such as recycling, dismantling and remanufacturing. At the same time, allowing the five major assemblies with remanufacturing conditions to be sold to enterprises with remanufacturing capacity is conducive to enhancing the profitability of automobile dismantling enterprises, and the industry prosperity is expected to be better.