\u3000\u3000 Cngr Advanced Material Co.Ltd(300919) (300919)
Key investment points
The company expects that the net profit attributable to the parent company in 2021q4 will be 143-197 million yuan, down 29% ~ 49% month on month, slightly lower than the market expectation. The company expects that the annual net profit attributable to the parent company in 2021 will be 908-962 million yuan, with a year-on-year increase of 116% – 129%, of which the net profit attributable to the parent company in 2021q4 will be 143-197 million yuan, with a year-on-year increase of 2.03% – 40.63% and a month-on-month decrease of 29% ~ 49%, slightly lower than the market expectation. In 2021, the net profit not attributable to the parent company was deducted from 748-802 million yuan, with a year-on-year increase of 116% – 131%, of which the net profit not attributable to the parent company was deducted from 83-137 million yuan in 2021q4, with a month on month decrease of 43% – 65%.
The shipment volume of 2021q4 was flat and slightly increased month on month, and the market share of the whole year further increased, ranking first in the world. Limited by the impact of the sharp rise in the cost of electricity and auxiliary materials, we expect the sales volume of ternary precursors and Co3O4 of 2021q4 company to be 48000-50000 tons, with a slight increase compared with the third quarter. The share of iron lithium batteries in 2021q4 industry has further increased, which has an impact on the growth rate of ternary. At the same time, some projects of LG, the company’s largest customer, reduced production in the fourth quarter, superimposing 2021q4 power and production restrictions, which affected the production capacity. Therefore, the growth rate of 2021q4 shipments of the company slowed down slightly month on month. In 2021, the total sales volume of ternary precursor and Co3O4 of the company was about 176000 tons, with a year-on-year increase of 94%, and the market share continued to increase.
2021q4 auxiliary material price increase will affect the profit in the short term, and the integration will significantly improve the profit level in 2022. We expect to deduct non single ton net profit of about 25000 yuan / ton in 2021q4, down 50% month on month, and deduct non single ton profit of about 4500 yuan / ton in the whole year. The significant decline in 2021q4 profit is mainly due to the withdrawal of RMB 80 million bonus and the sharp rise in the cost of superimposed accessories, which affects RMB 90 million. If added back, the non single ton profit will be deducted by nearly 6000 yuan / ton, with a month on month increase of 5-10%.
China’s external production expansion and speed-up, vertical integration, horizontal expansion of lithium iron phosphate and all-round development. The company’s production capacity exceeded 200000 tons at the end of 2021, double that at the beginning of the year; The 60000 ton IPO raised investment project of the company’s western base, the 35000 ton precursor material and recycling project of the central base and the 180000 ton refinancing raised investment project of the southern base are advancing steadily. The production capacity of the western base and the central base will be completed and put into operation in Q1 in 2022. We expect that the production capacity of 2022q2 will exceed 300000 tons, and the annual shipment will be 300000 tons +, an increase of 70% year-on-year. The company expects that the production capacity will exceed 500000 tons in 2023, reaching the previous production capacity target of 2025. The expansion of production accelerates and supports the subsequent high growth of the company.
Profit forecast and investment rating: considering the short-term pressure on profits caused by the rise in the cost of auxiliary materials, we adjusted the net profit attributable to the parent company from 2021 to 2023 to RMB 939 / 2016 / 3028 million (the original forecast was RMB 1047 / 2146 / 3246 million), with a year-on-year increase of 124% / 115% / 50%, and the corresponding current price PE was 84x / 39x / 26x respectively. We gave 60xpe in 2022 and the corresponding target price was RMB 199.8, maintaining the “buy” rating.
Risk tip: the competition intensifies, the price of raw materials fluctuates, the supermarket is expected, and the sales volume and policy are less than expected
