Great Wall Securities Initiates Fengbei Biotech (603334.SH): Waste-Oil Recycling Foundation, Mixed-Oil Volume Growth
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Great Wall Securities initiates coverage of Fengbei Biotech (603334.SH) with an Accumulate rating (defined as 5–15% expected relative outperformance versus the industry index over six months); no target price is given, and the stock closed at RMB32.67 on August 21. The thesis rests on waste-oil recycling capabilities as a foundation and volume growth in industrial mixed oil. Global biodiesel consumption rose from 43.4 billion liters in 2018 to 70.6 billion in 2025 (about 7.2% CAGR), with the EU, US and Indonesia accounting for roughly 70.1% of 2025 demand; Indonesia lifted blending from B35 to B40 and announced B50 from July 2026. Fengbei's 2025 revenue reached RMB3.171 billion (+62.77%) with net profit of RMB141 million (+13.52%); bio-based materials contributed RMB2.436 billion (+99.8%), or 76.8% of revenue. Q1 2026 revenue grew 66.55% to RMB1.109 billion. Industrial mixed oil's share of bio-based materials revenue jumped from 12.5% in 2022 to 51.9% in H1 2025—2024 growth hit 1,002%—though gross margin compressed to 4.64%. Holding EU ISCC and REACH certifications, the company is expanding into Switzerland, Singapore and Korea as non-EU markets offset EU demand, and an IPO-funded 300,000-ton methyl ester line is due in December 2027. Forecast 2026–28 net profit: RMB156/193/276 million (P/E 30.0/24.2/17.0x).
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