\u3000\u3000 Guizhou Zhenhua E-Chem Inc(688707) (688707)
Core view
Optimistic about Sanyuan cathode track, it is expected to maintain high-speed growth in the future. It is expected that the installed capacity of lithium batteries in China will continue to maintain a high growth trend in the future, and the penetration rate of Shanxi Guoxin Energy Corporation Limited(600617) vehicles will reach 20% in 2025. With the continuous improvement of the global new energy vehicle market penetration, coupled with the small power and 3C market demand, the shipment of ternary cathode materials continues to increase.
The ternary positive pole pattern is relatively scattered, and leading enterprises are expected to increase market share by virtue of technological advantages. In 2021, Cr5 and CR3 of China's ternary cathode industry were 55% and 38%, and there was no significant difference in market share among leading companies. The production cost of high nickel cathode is greatly affected by the yield. The advantage of yield control of leading enterprises with core patents and technologies is transformed into cost advantage.
Strong single crystal technology, high nickel capacity expansion opens up growth space. Since its establishment, the company has focused on the technical route of single crystal. In 2009, the first generation of large single crystal ncm523 with primary particles was launched earlier in the industry. The three-time sintering process optimized the safety and cycle times of ternary cathode. High gross profit, high nickel capacity expansion, product structure optimization is expected to further optimize profitability. At present, the high nickel 7 series and 9 series further developed by the company are under verification. In addition, the company will provide the company with ternary precursors and battery grade lithium carbonate by participating in the layout of waste lithium-ion batteries and cathode material recycling business of Red Star Electronics, and the cost will be further reduced in the future scale expansion.
Profit forecast and investment rating: the increased penetration rate of new energy vehicles drives the rapid growth of cathode demand. As a single crystal leading enterprise, the company's capacity expansion is expected to drive the improvement of performance. It is estimated that the operating revenue of the company from 2021 to 2023 will be RMB 4.933 billion, 13.538 billion and 19.943 billion, and the net profit attributable to the parent company will be RMB 422 million, 666 million and 1.071 billion, corresponding to PE of 52.72x, 33.39x and 20.76x. For the first time, it will be rated as "buy".
Risk tip: the capacity expansion is less than expected, the sales volume of new energy vehicles is less than expected, the price of raw materials continues to rise, the iteration of product technology is less than expected, and there is a great risk of dependence on Contemporary Amperex Technology Co.Limited(300750)
