ST Jiaao (603822)

Equity Research Report　|　Industry: Sustainable Aviation Fuel (SAF)/Biodiesel + Environmentally Friendly Plasticizers　|　Report Date: 2026-10-28　|　Market data as of the 2026-10-27 close

This report was automatically compiled by AI based on public information and is for reference only. It does not constitute investment advice.

Key conclusion: SAF volume growth drove a RMB 214 million turnaround in Q3, but minority shareholders took more than 60% of net profit and PB remains elevated

Market data as of the 2026-10-27 close

1. Key Investment Points

• Profitability has inflected, but earnings attributable to the parent are diluted: Net profit attributable to the parent turned positive at RMB 281 million in the first three quarters of 2026; Q3 alone generated RMB 214 million, up 91.8% QoQ, with a gross margin of 27.07%. Minority interests accounted for more than 60% of consolidated net profit, at RMB 407 million.
• Growth depends on SAF spreads and capacity ramp-up: In 2025, revenue from biomass energy rose 892% and its gross margin was 19.89%. In Q3, the average selling price rose 26.95%, outpacing raw-material costs. Phase II in Lianyungang is under construction, and the top five customers accounted for 83% of revenue.
• PE is at a historical low, but PB diverges from peers: PE (TTM) is 14.16x, at the 0th percentile over the past 5.2 years; PB is 7.14x, at the 71st percentile, versus peer PBs of just 1.25–1.59x. The current share price is RMB 62.26, with a market capitalization of RMB 4.783 billion.

Market Expectations and Evidence

• What the market is pricing in: Consensus forecasts call for net profit of RMB 498 million in 2026 and RMB 813 million in 2027, implying a PE of approximately 9.6x. The share price implies average annual EPS growth of 7.4% over 10 years. This is not directly comparable with the time horizon of institutions’ short-term forecasts.
• What the evidence shows: Net profit attributable to the parent of RMB 281 million in the first three quarters reached 56% of the full-year consensus forecast; the Q3 gross margin of 30.41% exceeded the full-year 2025 figure. However, minority shareholders took more than 60% of profit, and the top five customers accounted for 83% of revenue. Whether attributable net profit can reach RMB 498 million remains to be confirmed by a Q4 free of impairment charges.

Evidence leans bullish; confidence: medium (some financial fields still lack official verification or disclosure dates)

The inflection in earnings and increase in gross margin are clear, and the PE percentile is low. However, profit leakage to minority shareholders, customer concentration and elevated PB limit confidence.

2. Business and Competitiveness

2.1 Business Mix

The company processes externally sourced waste oils into biodiesel and SAF, exports to international oil companies and airlines on the strength of its whitelist status and certifications, and earns processing spreads and policy premiums.

2.2 Competitive Advantages

Strength of competitive advantages: weak

• Licenses/certifications: The company has obtained ISCC and DDC certifications and airworthiness approval for SAF. In 2025 it secured whitelist export permission for bio-based aviation fuel; revenue from biomass energy rose from RMB 415 million to RMB 4.115 billion that year.
• Scale/integration: Phase I of the 500,000-tonne-per-year UCO conversion project in Lianyungang is operational, with Phase II under construction. The subsidiary has biodiesel capacity of approximately 300,000 tonnes per year, spanning the UCO-to-diesel-to-SAF chain.
• Shareholder alignment: BP increased its capital contribution to Lianyungang Jiaao in 2024, reaching approximately 15% ownership; China National Aviation Fuel was brought in during 2025.

Key threats include the EU extending trade remedies to SAF or tightening UCO traceability requirements, along with buyer bargaining power given the top five customers’ 83% share of revenue and the reputational discount associated with ST status following two information disclosure violations.

2.3 Value-Chain Position and Profitability Trends

• The average price of the main feedstock, waste animal and vegetable oils (UCO), was RMB 6,847/tonne in 2025, up 14.47% YoY. Direct materials accounted for 67.56% of biomass energy costs. Prices fluctuate with international oilseed and biofuel policies, and the company has no pricing power.
• The top five suppliers accounted for just 20.16% of purchases; UCO collection and trading businesses are highly fragmented. The average price of octanol, a plasticizer raw material, fell 31.08% YoY in 2025, while downstream price cuts absorbed the benefit of lower input costs.
• SAF export negotiations are with a small number of international oil companies, airlines and traders. Formula-based pricing and annual price reduction risks are higher than in the plasticizer business.
• The plasticizer business serves approximately 2,000 plastics manufacturers. The industry is overcapacity and products are homogeneous; even after a 6.24% decline in average selling prices in 2025, gross margin was only -1.47%, making the company a price taker.
• The top five customers generated combined sales of RMB 4.015 billion in 2025, or 83.11% of revenue (as of 2025-12-31; customer names were not publicly disclosed). Bargaining power clearly rests with buyers.
• Accounts receivable at the end of 2025 were RMB 278 million, just 5.8% of revenue, indicating favorable collection terms. However, production of 413,600 tonnes exceeded sales of 307,800 tonnes, with inventory accumulation tying up capital. Finance costs of RMB 142 million were 4.5 times net profit attributable to the parent; in practice, working capital is funded by banks and minority shareholders.

The company sits in the processing segment of the smile curve: it does not control UCO resources, and the top five customers account for 83% of sales; it also lacks a consumer-facing brand. Profit comes from whitelist access, capital-intensive capacity and the temporary spread benefit of switching products to SAF. Whether gross margin can continue to rise depends on three factors: maintaining the SAF-UCO spread, ramping up Phase II in Lianyungang and obtaining quotas, and diversifying the customer base. A reliable basis for the consolidated gross margin in 2022 was unavailable, so the figure is shown as —.

2.4 Industry and Peer Comparison

SAF demand is created by mandatory blending policies such as the EU’s ReFuelEU (2% in 2025 and 6% in 2030), rather than by organic demand. Exports from China require administrative whitelist approval; competition has shifted from capacity to UCO collection networks, certification and long-term overseas contracts.

The core advantage is its first-mover position in whitelist status and ISCC/airworthiness certification. In 2025, its biomass energy gross margin of 19.89% exceeded that of Haixin Energy Technology’s comparable segment. Its weaknesses are its smaller scale relative to specialist producers such as Zhuoyue New Energy, lower plasticizer gross margins than Jianye, and top-five customer concentration of 83%, far above peers, leaving it more exposed to buyer bargaining power and policy changes.

3. Financial Quality

3.1 Operating Performance

Revenue and net profit attributable to the parent are presented in the same-period official reports and with the clearly stated currency; adjusted earnings and statutory profit are compared separately. All six revenue and attributable net profit figures in the table have been checked item by item against the issuer’s periodic reports. All six YoY growth rates were calculated from the current- and prior-period figures in the source text and match the table.

Revenue in the first three quarters of 2026 rose 56% YoY, and net profit attributable to the parent turned positive at RMB 281 million. Gross margin increased from 17% in 2025 to 27.07%; Q3 attributable net profit was RMB 214 million, up 91.8% QoQ. Adjusted net profit attributable to the parent for Q3 alone was RMB 214 million, broadly in line with attributable net profit for the quarter. The main driver of growth was a sharp increase in biomass energy revenue. Minority interests of RMB 407 million accounted for more than 60% of consolidated net profit, leaving only about 40% attributable to the parent.

3.2 Financial Health Check

4. Valuation and Market Expectations

4.1 Valuation

Valuation multiples were calculated programmatically using closing prices as of 2026-10-27 (trailing 12-month basis); peer multiples were calculated on the same basis using closing prices as of 2026-10-27.

Implied market expectations: At the current PE of 14.16x, if investors require an annualized return of 8% and assume a valuation of 15x PE in 10 years, EPS would need to grow at an average annual rate of approximately 7.4% (excluding dividends, a conservative assumption). The time horizon and basis differ from those of short-term institutional net profit forecasts, so the two cannot be directly compared.

PE (TTM) of 14.16x is at the 0th percentile over the past 5.2 years and appears cheap, but this is due to the low base of net profit attributable to the parent of only RMB 31 million in 2025. Based on the 2026 consensus net profit forecast of RMB 498 million, PE is approximately 9.6x. PB of 7.14x, however, is at the 71st percentile and far above peers at 1.25–1.59x. The price implies average annual EPS growth of 7.4% over 10 years, which is not directly comparable with short-term institutional forecasts due to differences in time horizon and basis. Valuation already prices in high growth, while PB highlights the leverage and dilution risks associated with net assets of only RMB 670 million.

4.2 Consensus Forecasts

Eastmoney summary of research reports published in the past six months, as of 2026-10-28. Details of visible institutional research reports are available; rating counts are reported separately. Sample counts for net profit and EPS were not disclosed for 2026E, 2027E or 2028E.

4.3 Institutional Views

No institutional target price is available for citation.

5. Catalysts and Recent Events

5.1 Key Upcoming Milestones

5.2 Recent Important Events

• 2026-10-23: Q3 report shows a sharp turnaround, with quarterly profit exceeding the first-half total (positive): Net profit attributable to the parent was RMB 281 million and adjusted net profit attributable to the parent RMB 285 million in the first three quarters, both turning positive YoY. Q3 net profit attributable to the parent was RMB 214 million, up approximately 92% QoQ, with a quarterly gross margin of 30.41%. The main driver was a sharp increase in biomass energy revenue. In Q3, the average selling price of this product rose 26.95% YoY, while raw-material prices rose by less; the faster increase in product prices than in raw-material costs boosted earnings.
• 2026-10: Joint and several liability guarantee for a RMB 300 million loan to Lianyungang Jiaao (negative): The company provided a joint and several liability guarantee, with a counter-guarantee, for a one-year RMB 300 million loan to its controlled subsidiary Lianyungang Jiaao New Energy. Total external guarantees amounted to RMB 6.081 billion, or 389.54% of the latest audited net assets; the company itself checked the special risk warning box in its announcement. At the subsidiary level, BP holds 13.50% and China National Aviation Fuel holds 10.00%.

6. Bull-Bear Debate and Risks

6.1 Bull Case

• Q3 net profit attributable to the parent was RMB 214 million, up 91.8% QoQ; gross margin rose to 27.07%, with widening spreads accelerating earnings growth.
• Biomass energy revenue rose 892% in 2025. The company has a first-mover advantage in whitelist status and ISCC/airworthiness certification, while Haixin Energy Technology’s comparable segment remains loss-making.
• The 2026 consensus net profit forecast of RMB 498 million implies a PE of approximately 9.6x, below Jianye’s 20.69x.

6.2 Bear Case

• Minority interests of RMB 407 million accounted for more than 60% of consolidated net profit, leaving only about 40% attributable to the parent and diluting earnings attributable to the parent.
• The top five customers account for 83.11% of revenue. Buyers hold the bargaining power in SAF exports, with high risks from formula-based pricing and annual price reductions.
• PB of 7.14x is at the 71st percentile, versus just 1.25–1.59x for peers; net assets of RMB 670 million amplify sensitivity to leverage and dilution.

6.3 Other Risks

• If the EU extends trade remedies to SAF or tightens UCO traceability requirements → export volumes and spreads could contract, directly reducing biomass energy gross margin.
• External guarantees of RMB 6.081 billion equal 389.54% of net assets → if subsidiaries face repayment pressure, calls on the guarantees would erode profit and net assets.
• Interest-bearing debt ratio of 52.14% and quick ratio of 0.59 → changes in interest rates or financing conditions could increase finance costs and amplify volatility in net profit attributable to the parent.
• Convertible bond registration approval expires on 2027-04-22 → if issuance begins, conversion could dilute share capital and EPS.

7. Monitoring Checklist

8. Share Price and Short-Term Outlook (Next Week; Scenario Analysis for Reference Only)

⚠️ Risk warning: The following subjective scenario analysis is based on currently available technical and fund-flow data. It does not constitute investment advice.

8.1 Technical Overview

The positive Q3 turnaround news has been reversed by a long, high-volume bearish candle of -7.69%. The price has fallen below the MA60 and Bollinger midline, and the MACD histogram is weakening at an accelerating pace, indicating a deterioration in the short-term chart pattern. However, RSI6 has fallen to the oversold level of 25.9, and the share price is only about RMB 2 above the Bollinger lower band at RMB 60.01, creating the potential for a technical rebound after further downside. The key question is whether the MA60 around RMB 62.5 can be quickly reclaimed.

8.2 Key Price Levels

8.3 One-Week Range Based on Historical Volatility

Using the 2026-10-27 price of RMB 62.26 as the baseline, the closing-price range for the next five trading days is estimated from the return distribution over the past 300 trading days (scaled using the current index-weighted daily volatility of approximately 3.6%, while retaining this stock’s own frequency of large rises and falls):

This range reflects only the stock’s recent volatility and does not indicate the direction of price movement. In the event of a major announcement or a sharp market decline, the actual share price could move outside the range.

8.4 Scenarios for the Coming Week (Subjective Weights, Not Statistical Probabilities)

• Consolidation (relatively higher weight, approximately 50%): Price fluctuates in the RMB 60.0–66.0 range and stabilizes on lower volume after becoming oversold. Trigger conditions: daily trading value falls below RMB 70 million and no new negative news emerges. Based on historical volatility, the probability of the closing price being in this range one week later is approximately 35%.
• Further downside (medium weight, approximately 30%): A decisive break below MA60 (RMB 62.5) with trading value remaining above RMB 150 million would put the Bollinger lower band at RMB 60 in focus; if that level fails, the price could move toward RMB 55. Based on historical volatility, the probability of the closing price being in this range one week later is approximately 35%.
• Rebound (relatively low weight, approximately 20%): A move above the Bollinger middle band at RMB 67.2 on higher volume, followed by a sustained hold, would open the way to above RMB 70. A simple oversold bounce is unlikely to last. Based on historical volatility, the probability of the closing price being in this range one week later is approximately 15%.

Figures in parentheses are subjective weights; probabilities at the end of each sentence are inferred from the volatility range above and reflect volatility only, not market direction.

8.5 Fund Flows and Liquidity

Over the past 10 trading days, daily trading value ranged from RMB 59 million to RMB 179 million, and turnover ranged from 1.13% to 3.35%. This is a small-cap stock with low liquidity, where large trades can easily amplify slippage. As of 2026-09-30, the top 10 tradable shareholders collectively held 55.48% of tradable shares. The largest shareholder, Tongxiang Shunchang Investment, held 39.09%; most of the rest were individual shareholders, with no visible public funds, social security funds or QFIIs. This data is disclosed with a lag, and the current ownership structure may have changed; shares are highly concentrated in the hands of industry-related capital.

A rise in daily trading value to above RMB 180 million, together with a close above RMB 67.2, could be viewed as a sign of fund inflows.

The scenarios above are based on the 2026-10-27 closing price and estimates using historical prices and technical indicators. Short-term share price movements may also be affected by news, fund flows, broader market conditions and other factors. Technical indicators are inherently lagging and limited; they do not guarantee actual future price movements and do not constitute a buy or sell recommendation. Please make independent judgments based on the latest market information and bear the investment risks yourself.

Sources

• 中国股票经营分析表 - 浙江嘉澳环保科技股份有限公司 - 2025年12月31日 - 同花顺
• ST嘉澳（603822）2026年半年度管理层讨论与分析-证券之星 - ST嘉澳（603822）2026年半年度管理层讨论与分析
• 中国证券报 - 浙江嘉澳环保科技股份有限公司
• ST嘉澳（603822）2026年半年度管理层讨论与分析-证券之星
• 证券日报 - 浙江嘉澳环保科技股份有限公司 2024年年度报告摘要
• 嘉澳环保(603822)首次覆盖：生物航煤项目启航 打开利润新增长通道 - 嘉澳环保(603822)首次覆盖：生物航煤项目启航 打开利润新增长通道
• 603822 ST嘉澳 - 核心题材
• ST嘉澳上市公司信息
• 2026年第三季度报告
• 2025年年度报告
• 2024年年度报告
• 2023年年度报告（更正后）
• 腾讯财经行情（2026-10-28）
• 东方财富F10 合并资产负债表（2026三季报）
• 东方财富 F10 盈利预测
• ST嘉澳:2026年第三季度报告
• 中国证券报 - 浙江嘉澳环保科技股份有限公司 - | 第B093版：信息披露 | 上一版 下一版
• 浙江嘉澳环保科技股份有限公司2026年第三季度报告
• 浙江嘉澳环保科技股份有限公司 第七届董事会第三次会议决议公告 - 稿件搜索
• 担保ST嘉澳(603822):为控股子公司提供担保的进展公告 - 担保ST嘉澳(603822):为控股子公司提供担保的进展公告
• ST嘉澳(603822):第七届董事会第三次会议决议
• ST嘉澳(603822):2026年第三季度主要经营数据公告
• ST嘉澳(603822):2026年第三季度主要经营数据公告 - ST嘉澳(603822):2026年第三季度主要经营数据公告
• ST嘉澳: 关于为控股子公司提供担保的进展公告 - 证券代码：603822 证券简称：ST 嘉澳 公告编号：2026-063
• 东方财富 个股资金流向
• 东方财富 股东研究

This report was automatically generated by AI based on information retrieved and compiled from public sources. Information is current as of the 2026-10-27 close and may differ in timeliness; please refer to the company’s official announcements and authoritative data terminals for specific figures. This report is for information compilation and research reference only and does not constitute investment advice. Investors should make independent judgments and bear the investment risks themselves.