Caixin News Agency, August 11, the National Development and Reform Commission today issued an announcement on the "Interim Measures for the Administration of Auto Parts Remanufacturing (Draft for Comment)" for public comments. Encourage automobile manufacturers to recycle old motor vehicle parts for remanufacturing through the after-sales service system. Encourage specialized old parts recycling companies to provide remanufacturing enterprises with old parts that meet the requirements from the maintenance channel.

The "Measures" propose that remanufacturing enterprises should use the purchased "five major assemblies" of scrapped automobiles for the remanufacturing of their own enterprises and shall not resell them; the parts not used for the remanufacturing of their own enterprises shall be sold to smelting or crushing enterprises as waste materials.

After the news was released, the car dismantling leader Tianqi shares straight-line pull-up board.

As of press time, the plate also has Huahong Technology, China Re-capital ring and so on to follow the rise.

This is a further detailed regulation on the recycling and dismantling of scrapped motor vehicles after the seven ministries and commissions officially issued the "Detailed Rules for the Implementation of the Administrative Measures for the Recycling of Scrapped Motor Vehicles" on July 31. In the detailed rules, it has been stipulated that scrapping and dismantling enterprises are allowed to sell the "five major assemblies" to enterprises with remanufacturing and reuse qualifications.

Yin Zhongshu, an analyst at Everbright Securities, said that with the rapid increase in car ownership after the maturity of my country's auto industry, and the gradual intensification of the impact of old motor vehicles on air pollution, how to quickly and effectively guide the scrapping of old vehicles has become a promotion of my country's auto market. The dual task of healthy development and achieving environmental protection goals.

Everbright Securities believes that the core crux of the early industry is that dismantling enterprises only rely on scrap metal and other sales to make profits, and the profit space is limited. At this stage, the core change of the industry lies in the liberalization of remanufacturing of the "five major assemblies", which is of great significance for improving the profitability of the automobile dismantling industry.

China's scrap car recycling level is low, hundreds of billions of market space to be activated. In 2019, the number of cars in China was 0.26 billion, the theoretical number of cars scrapped was 9.1 million, and the actual number of cars recovered was 1.95 million, with a recovery rate of only 0.75 percent. With the further improvement and implementation of the domestic automobile recycling system, the scrap rate and recovery rate of automobiles are expected to increase.

According to the forecast of the Prospective Economic Research Institute, the theoretical number of domestic scrapped cars in 2020 is 18.51 million. Under conservative estimation, based on the scrap weight of 1.28 tons of car bicycles, the theoretical total weight of domestic scrap cars in 2020 is 23.6928 million tons, including scrap steel, scrap non-ferrous metals, and 21.5605 million tons of dismantling products that need further treatment, bringing business opportunities to solid waste treatment enterprises and resource recycling enterprises.

A series of policy releases will benefit companies across the industry chain. Everbright Securities proposes to pay attention to Huahong Technology, a leading enterprise in automobile dismantling and scrap steel treatment equipment.