\u3000\u3000 Contemporary Amperex Technology Co.Limited(300750) (300750)
Key points
Event: Contemporary Amperex Technology Co.Limited(300750) announced that the net profit in 2021 is expected to be 14-16.5 billion yuan, with a year-on-year increase of 150.75% – 195.52%. The net profit after deducting non recurring profits and losses is 12-14 billion yuan, with a year-on-year increase of 181.38% – 228.28%, and the performance is much higher than expected.
The performance in the fourth quarter greatly exceeded expectations and accelerated upward month on month. The net profit attributable to the parent company in 2021q4 is expected to be 6.249 billion yuan – 8.749 billion yuan, with a month on month increase of 91% – 167%, deducting the net profit not attributable to the parent company of 5.396-7.396 billion yuan, with a month on month increase of 101% – 175%. The performance exceeded expectations mainly because (1) the price of upstream raw materials rose more, while the company’s inventory at the end of 21q3 was 35 billion yuan. Low price inventory made the company’s cost lower and its profitability better than market expectations; (2) New production capacity drives output growth, and Q4 revenue recognition exceeds expectations; (3) Decrease in cost rate, etc.
Capacity release accelerated and Q4 sales exceeded expectations. According to the data of xinlune lithium battery, the output of Q4 battery is expected to be 46gwh. Ningde dingzeng’s reply disclosed that from January to September 2021, the production capacity was 106.41gwh, the output was 103.5gwh and the sales volume was 73.4gwh. With the continuous improvement of production capacity, the company still maintained a high capacity utilization rate. Combined with the orderly release of new production capacity, the sales volume of Q4 further exceeded expectations. According to the previously announced production expansion plan, we expect the company’s total capacity (including joint venture capacity) to be about 770gwh and equity capacity to be about 700gwh in 2025, and the capacity advantage is expected to be further expanded.
The market share has increased steadily, and the leading position of lithium battery in the world is stable. According to the data of power battery innovation alliance, the installed capacity of Ningde China Shipbuilding Industry Group Power Co.Ltd(600482) battery in 2021 was 80.51gwh, accounting for 52.1% of the market, of which the installed capacity in December was 14.58gwh, accounting for 55.6% of the market. China’s leading position is stable. Globally, according to sneresearch data, from January to November 2021, Contemporary Amperex Technology Co.Limited(300750) still maintained the leading position in the electric vehicle battery market. The shipment volume of Contemporary Amperex Technology Co.Limited(300750) was 79.9gwh, with a year-on-year increase of 180%, ranking first with a market share of 31.8%, with a year-on-year increase of 7.7pcts, 10 percentage points higher than the second LG energy solution.
Lithium battery leaders have maintained rapid growth, and overseas markets and energy storage have more space than expected. With the marginal increment brought by the implementation of the US reconstruction act and the second growth curve provided by the large-scale energy storage market, there is still room for the performance of the midstream lithium battery sector to exceed expectations. The proportion of Ningde’s overseas revenue in operating revenue increased from 3.5% in 2018 to 21% from January to September 2021 to 14.2 billion yuan. The increasing proportion of lithium iron phosphate is also an opportunity for Ningde, including the industrial chain, to enter overseas.
Profit forecast, valuation and rating: the demand for lithium batteries in the fields of new energy vehicles and energy storage is expected to continue to be revised, Ningde has positive capacity planning, and there is large room for battery penetration in electric vehicles + energy storage + other markets. The company’s excellent supply chain management and control ability will maintain the cost advantage, and the company’s net profit forecast for 2021-23 will be raised to 15.3/292/41.5 billion yuan (up 36% / 36% / 27%), The current share price corresponds to 88 / 46 / 32 times PE. As a global leader in power batteries, the company has a promising energy storage business with high certainty of future growth and maintains a “buy” rating.
Risk warning: risk of raw material price rise; The installed capacity is less than expected; Increased competition; Risk of technical route change.
