Since December 2021, the share price of Contemporary Amperex Technology Co.Limited(300750) (300750. SZ), a leading power battery enterprise, has experienced a sharp correction. On December 3, the share price fell continuously after reaching the high of 692 yuan / share. Although it rose slightly from the low of 524.24 yuan / share to 592.6 yuan / share before the Spring Festival, the decline reappeared.
In the first week after the Spring Festival in 2022, Contemporary Amperex Technology Co.Limited(300750) fell in large quantities in four trading days, with a decline of 116.01 yuan in a single week and a market value decline of 270.419 billion yuan, which is equivalent to a Shanghai Pudong Development Bank Co.Ltd(600000) drop in a week. As of Friday’s closing, the share price had fallen 202.01 yuan / share from the December high, down nearly 30%.
Affected by the decline of Contemporary Amperex Technology Co.Limited(300750) share price, the gem index ( Contemporary Amperex Technology Co.Limited(300750) weight more than 20%) fell from 3467.41 points to 2742.51 points in the same period, a decrease of 20.9%. Some people believe that the sharp decline in the stock price of Contemporary Amperex Technology Co.Limited(300750) is not only the fuse that triggered the stock price turbulence of the whole power battery industry, but also one of the important disturbing factors that triggered the turbulence of a shares.
At the same time, many institutions issued research reports and gave Contemporary Amperex Technology Co.Limited(300750) different expectations and target prices. The difference between different institutions on the target price was doubled. Who should listen to the pricing of “ningwang”?
different opinions on institutional pricing
The topic of how much “ningwang” is worth has never stopped. Although almost all institutions have given “buy” suggestions, the pricing difference has long existed. The share price correction in recent months seems to make the differences more obvious.
After Contemporary Amperex Technology Co.Limited(300750) released the performance forecast, many institutions indicated that the company’s performance exceeded expectations, or chose to maintain strong recommendation, or revised the target price.
For example, Soochow Securities Co.Ltd(601555) gave a target price of Contemporary Amperex Technology Co.Limited(300750) 824 yuan / share in the Research Report on December 31. It is expected that the net profit attributable to the parent company from 2021 to 2023 will be 11.7 billion / 24 billion / 37.5 billion yuan, corresponding to 118 / 57 / 37 times of PE respectively.
After the announcement of the performance forecast for the fourth quarter of 2021, Soochow Securities Co.Ltd(601555) raised the target price to as high as 905.8 yuan / share on January 28, and the net profit attributable to the parent company of Shangxiu company from 2021 to 2023 was 152 yuan / 302 yuan / 46.3 billion yuan, corresponding to 88 / 44 / 29 times of PE respectively.
Similar to the target price given by Soochow Securities Co.Ltd(601555) , in early December 2021, Huachuang securities gave a target price of 825 yuan and maintained the “strong promotion” rating. It is predicted that the net profit attributable to the parent company from 2021 to 2023 will be 11.6 billion / 21.4 billion / 32.1 billion yuan, 4.98/9.16/13.75 times of EPS and 138 / 75 / 50 times of PE respectively. On February 10, the brokerage still recommended Contemporary Amperex Technology Co.Limited(300750) as a stable leader with global competitiveness in the tracking report of power equipment and new energy industry.
For another example, in October last year, Everbright Securities Company Limited(601788) said after the third quarterly report of Contemporary Amperex Technology Co.Limited(300750) that due to the continuous upward revision of lithium battery demand in new energy vehicles and energy storage and other fields, Ningde has positive capacity planning, large battery penetration space in electric vehicles + energy storage + other markets, and the large volume of energy storage business is expected. It is predicted that the net profit of the company from 2021 to 23 will be 11.2 billion / 21.6 billion / 32.8 billion yuan respectively, The current share price corresponding to PE is 128 / 66 / 44 times respectively. On January 27, Everbright Securities Company Limited(601788) raised the company’s net profit forecast for 2021-23 to 15.3 billion yuan / 29.2 billion yuan / 41.5 billion yuan respectively (36% / 36% / 27% respectively), and the corresponding PE of the current stock price was 88 / 46 / 32 times respectively.
Huatai Securities Co.Ltd(601688) also raised the target price of Contemporary Amperex Technology Co.Limited(300750) to 764.4 yuan / share in the Research Report on February 5, compared with the previous target price of 747 yuan / share.
The FAQs during share price correction published by UBS Securities on February 11, 2022 believes that Contemporary Amperex Technology Co.Limited(300750) has ushered in a buying opportunity and sets the company’s target price at 700 yuan / share. UBS said that the most logical explanation for the stock price adjustment is that the gem is revised in the sector rotation, and the figure of Contemporary Amperex Technology Co.Limited(300750) 2021 financial report forecast exceeds the market’s general expectation by 30% to 40%, and there is still a lot of room for rise in 2022.
It is worth noting that the difference in the target price given by the above bullish institutions alone has exceeded the current price of 200 yuan / share. On the other hand, some securities companies have chosen to “reduce the price” of Contemporary Amperex Technology Co.Limited(300750) .
On February 10, Wei Zhichao, chief economist of capital securities, suggested shipping at high prices in a report entitled How long can Contemporary Amperex Technology Co.Limited(300750) fall? A quantitative analysis perspective, which attracted great controversy in the market. He compared the sharp fall after the festival with the sharp adjustment of Mao index after the Spring Festival in 2021, and believed that the high valued institutional group stocks seemed to step into the same river again. After the catalyst of the rising logic wavered, the overvalued conglomerates faced the dilemma of killing more, Contemporary Amperex Technology Co.Limited(300750) may not have a bottom in the short term.
Wei Zhichao believes that analyzing the future rise and fall of Contemporary Amperex Technology Co.Limited(300750) from the perspective of short-term market sentiment can refer to the stock price trend of Kweichow Moutai Co.Ltd(600519) in 2021. “By fitting, we judge that the adjustment of Contemporary Amperex Technology Co.Limited(300750) may not be over, and there may still be 20% room for decline in the future.”
what is rapidly affecting the stock price?
According to the performance forecast released on Contemporary Amperex Technology Co.Limited(300750) January 27, the company expects the net profit attributable to shareholders of listed companies to be 14 billion yuan to 16.5 billion yuan in 2021, with a year-on-year increase of 150.75% to 195.52%. From the data, the performance forecast of Contemporary Amperex Technology Co.Limited(300750) shows that the company has resolved the pressure of rising upstream material prices and still has a certain growth.
In terms of market share, Contemporary Amperex Technology Co.Limited(300750) is the absolute leader. According to SNE research data, the installed capacity of Contemporary Amperex Technology Co.Limited(300750) power battery ranked first in the world in 2021, with a total of 97gwh / yoy, a year-on-year increase of 168%; The global market share is 33% / yoy + 8pct. Significantly exceed the installed capacity of LGC by 60gwh / yoy + 76%; The global market share is 20% / yoy3pct.
At the business level, in January this year, Contemporary Amperex Technology Co.Limited(300750) released the battery “chocolate power exchange block” specially developed and produced for shared power exchange, marking that Contemporary Amperex Technology Co.Limited(300750) has completed the closed-loop value chain of the whole life cycle of battery research and development, manufacturing, use and recycling. The company’s implementation of the power exchange mode can not only effectively alleviate the “mileage anxiety” and “charging anxiety” of electric vehicles, better take into account the cost and performance, but also help to accelerate the promotion of battery standardization, so as to drive the development of the whole power exchange industry.
Since it’s all good, what’s the problem? Many industry insiders interviewed by the reporter said that although macro level and industry level factors will affect the change of stock price, the reason for the rapid impact on stock price in the near future is that public opinion has driven pessimism.
There have been various negative news about the network Contemporary Amperex Technology Co.Limited(300750) recently. More people believe that the sharp decline in the share price of Contemporary Amperex Technology Co.Limited(300750) is the fuse that triggered the turmoil of the whole power battery industry.
Contemporary Amperex Technology Co.Limited(300750) recently announced that the above-mentioned series of malicious rumors have caused misunderstanding and misinterpretation in the market and affected the corporate reputation. Rumors are groundless and bad in nature. “In order to safeguard the legitimate rights and interests of the enterprise, our company has officially reported the case to the public security organ on February 12, 2022 and will investigate the legal responsibility of the rumor mongers according to law.” The company said.
A broker told the first financial reporter that the market had long expected the correction of the company’s value, but the expected correction was not so fast. The bad news amplified the market’s correction of Contemporary Amperex Technology Co.Limited(300750) valuation.
Zhang Yuhan, investment director of Huarui investment in new energy industry, told reporters that we should look at the “story” of Contemporary Amperex Technology Co.Limited(300750) from a more macro dimension. He believes that the development of the automobile industry has its objective laws. For example, automobile enterprises will not only rely on a single supplier for core parts such as power batteries, but will introduce secondary supply and tertiary supply after sales. For example, European and American governments will “urge” enterprises to invest and build factories locally to maintain industry and employment.
Zhang Yuhan said that compared with online rumors, the more likely situation in the future may be that the United States “urges investment and plant construction” or Tesla introduces other suppliers. “After all, even Toyota, which has been deeply rooted in the United States for decades, is under pressure to relocate its factories in Mexico during the trump period. Therefore, the current short-term adverse factors for industrial development are as eternal as light and shadow. They are the long-term necessary costs of the industry, and often the leading enterprises are qualified to bear them. Rather than being bad, I prefer to regard him as a person who must bear the weight if he wants to wear a crown.”
long term fluctuations are affected by multiple factors
In the long run, the price fluctuation of “ningwang” is also affected by multiple factors.
A public fund person told the first financial reporter that at the micro level of funds, there may still be a “prisoner’s dilemma” in Contemporary Amperex Technology Co.Limited(300750) , which is related to the high fixed increase of the company.
Previously Contemporary Amperex Technology Co.Limited(300750) proposed a fixed increase plan of 58.2 billion yuan. According to the latest fixed increase announcement, the company plans to raise no more than 45 billion yuan and issue to no more than 35 specific objects for the construction of five major projects, including Fuding era lithium ion battery production base project and Guangdong Ruiqing era lithium ion battery production project phase I. Although the amount raised has been reduced by 13.2 billion yuan, it is still a big Mac in the fixed growth of the new energy industry.
“Since the fixed increase stipulates that the issue price shall not be lower than 80% of the average price of the company’s A-Shares 20 trading days before the pricing benchmark date, for institutions that are optimistic about the company for a long time, the most reasonable way is to cut off the stocks in their hands at a high level and buy the” discounted “stocks at a low level. But in fact, doing so is another way to kill more.” “This is obviously not the best choice for the collective, but there is really not much money available in the market,” the Fund said
Looking at the macro level, the allocation of large categories of assets under the long cycle is one of the most important macro variables affecting the A-share market. Zhang Yingjun, research director and general manager of the Fund Investment Department of Bodao Fund Management Co., Ltd., believes that in 2022, the trend of the transfer of major asset allocation to A-Shares will continue. Without major changes in major asset allocation, the probability of the market entering a relatively long-term bear market is low.
However, there will be some variables affecting the inflow rate of class A shares in 2022. Among them, the most important variable is that the Federal Reserve enters the interest rate increase cycle in advance, which will affect the domestic allocation of overseas funds. The most noteworthy is how many times the Fed will raise interest rates, whether it will raise interest rates actively or passively.
“Active interest rate hike is an active measure taken to control inflation expectations and potential long-term inflation pressure after the economic situation is good to a certain extent. Passive interest rate hike is a passive interest rate hike in the event of inflation when the economy and employment have not returned to the ideal situation.” Zhang Yingjun further said that if the interest rate increase is within the expectation, the impact on the market will be relatively acceptable. If the number of interest rate increases exceeds the expectation, it may have a great impact on the market pattern this year. If the Fed raises interest rates more than expected, firstly, it will affect the speed of foreign capital flowing into a shares. Secondly, the attraction of US bonds will increase, which will also have the effect of capital diversion to a certain extent.
In addition, there are also new variables in China. Since the second half of 2021, the profit demonstration effect of China’s public funds has weakened, which may affect the enthusiasm of capital admission. Therefore, Zhang Yingjun believes that compared with the past three years, the inflow rate of A-Shares in 2022 will be reduced, but the trend will continue.
China International Capital Corporation Limited(601995) the research report shows that there is no need to be overly pessimistic about the Chinese market. At present, the adjustment range of growth stocks may be large, but it will take time for investors to adjust their risk appetite under the background of the lack of short-term positive catalyst. China’s steady growth is still in force, and the market may continue to focus on the relevant fields of “steady growth”. In addition, the impact of global monetary tightening restricts the performance of the global overvalued growth sector. When China’s growth expectations gradually stabilize and the overseas market responds to monetary tightening to a certain extent, the market style may gradually have the conditions to return to the growth style, and the time point may be around the beginning of the second quarter of this year.
In addition, there are concerns about the industry from the market. After all, it’s not just Contemporary Amperex Technology Co.Limited(300750) , but the new energy sector as a whole has fluctuated recently. Many investors are worried about the later trend of the sector. One of the important concerns is whether the cost pressure and competition pattern of power batteries will change?
For example, at present, power batteries are in short supply. Will the sharp rise in the price of lithium as a raw material devour the profits of the industrial chain; Whether lithium is sustainable as a scarce resource to replace fossil energy; If the sustainability cannot be confirmed, whether the overestimation of some companies has logical defects in the long run, etc.
In this regard, Zhang Yingjun said that whether lithium is a scarce resource itself is not necessarily a completely accurate scientific judgment. “Even with scarce resources, human development is always making progress. Solve a phased problem in one way, just as we use fossil energy to solve the first step of human development. Today, electricity is used to solve the negative problems caused by fossil energy. I believe that the supply of lithium is sufficient before finding a better alternative.”
As for the concern about whether there is a change in the competitive pattern of power batteries, Zhang Yingjun believes that the technical barriers to manufacturing power batteries are not high, and there will indeed be competitors. However, as long as the overall demand increases for a long time and the products have technological progress, companies will still have a high probability to maintain their competitive advantage. “China is at the forefront of the global penetration of new energy vehicles, and Chinese enterprises are globally competitive.”
Zhang Yingjun concluded that the new energy vehicle sector experienced a valuation phase from 2020 to 2021. Although the valuation needs to be digested by growth in the later stage, new energy is still the most important investment field.
