\u3000\u3000 Hunan Zhongke Electric Co.Ltd(300035) (300035)
Unexpected drive logic
1. The profit per ton of negative electrode is higher than expected: the goal of double carbon is constantly firm, the control of energy consumption intensity is not relaxed, and the share of high energy consumption graphitization will be further concentrated. Release of external pressure: in the second half of last year, affected by the rapid rise of graphitization price, the negative pole single ton profit pressure was large, and the power restriction was gradually relaxed. At present, the rising kinetic energy of graphitization has gradually slowed down. After the negative pole shipment price of the company increased at the end of the year, it is expected to drive the ring to ring repair of single ton profit. Endogenous kinetic energy enhancement: the matching ratio of the company’s 2021q3 / Q4 graphitization equity is only 36% / 28%. The market is worried that the release of the newly planned graphite production capacity may be less than expected, and the price linkage is not enough to make up for the loss of single ton profit; We believe that the company’s newly expanded graphitization capacity is mainly distributed in Guizhou, Sichuan and Yunnan, and the energy consumption control is relatively flexible. The Guizhou project has obtained the EIA approval and energy assessment supporting documents, and is expected to be officially put into operation by the end of Q1 this year. It is expected that the self supply rate of graphitized equity will climb from 33% to nearly 60% in 2022q2, which is expected to drive the profit of single ton negative pole to exceed expectations.
2. The negative electrode shipment volume is potentially higher than expected: the company will accelerate the construction of negative electrode and graphitization capacity. If Gui’an new area and Qujing, Yunnan are successfully put into operation at the end of the year, the current planned capacity will exceed 340000 tons, laying a good capacity foundation. The market believes that the company lacks the demand guarantee of large customers such as catl, and the annual shipment may be only 100000-110000 tons (the nominal capacity at the end of 2021 is 90000-100000 tons); However, we believe that the company has established a good technical and business cooperation relationship with catl. Under the background of tight negative electrode supply in the market, the company supplied less to catl with strict price requirements last year. At present, catl’s production capacity is accelerated month by month, and the company’s shipment to catl is expected to increase significantly under the background of rapid supply expansion. From 2021 to 2022, the shipment of negative electrode will be significantly increased from 24000 tons in 2020 to nearly 60000 tons and 120000-13000 tons, which will substantially enter the first echelon of power negative electrode. In addition, the company will expand the production of 100000 tons of negative electrode materials with Yiwei, and the medium and long-term shipment will be better guaranteed.
Research value
Different understanding from before:
Different prospects for the competition pattern: the market generally believes that the demand for negative pole will further concentrate on the first-line manufacturers. The negative pole shipment of the company in 2020 is only 24000 tons, which is significantly behind the leader. In fact, looking at the negative pole shipment of power battery alone (the leader has a large proportion of 3C negative pole shipment), it has been at the first-line or quasi first-line level in 2021, In addition, we believe that the growth rate of power batteries will be significantly faster than that of 3C batteries in the future. Therefore, as a pure power negative electrode company, the shipment growth rate of the company will be faster than that of other leading companies. In addition, the power and energy storage sectors pay more attention to the cost performance of products. The company goes deep into the negative pole application in the power field and gradually expands to the energy storage application. The advantages of cost control and rapid mass production are obvious, and the largest customer Byd Company Limited(002594) will greatly drive the demand of the company after the LFP battery is sold abroad.
Different understanding:
Different expectations for profitability: the market generally believes that on the basis of the continuous price rise in the upstream and the high pressure on the battery factory to transmit the price to the vehicle factory, the price increase of the negative link is limited, and the sharp price rise of graphitization will squeeze the profit space of the negative link. However, in fact, the negative electrode shipping unit price of the company has been raised for many times in 2021, and the self supply rate of graphitization of the company continues to improve, and the profitability of graphitization is expected to improve rapidly.
Profit forecast and target space
It is estimated that Hunan Zhongke Electric Co.Ltd(300035) from 2021 to 2023, the net profit attributable to the parent company will reach 378 / 835 / 1276 million yuan, eps0.5% 59 / 1.30/1.99 yuan / share, with a year-on-year increase of 130.71% / 120.89% / 52.85% in three years, and a compound increase of 98% in performance from 2020 to 2023. The corresponding valuation of the latest share price is 47.20/21.37/13.98 times, which is significantly lower than 35.23/24.92/18.41 times of the three-year average valuation of negative comparable companies this year and next. In view of the company’s high performance and high certainty of growth, and the rapid improvement of single ton profitability of negative electrode business in recent years, the company is given 35 times PE in 2022, corresponding to the target price of 45.47 yuan / share in 2022, with 64% room for current price increase.
Risk factors
The production capacity is not up to expectations; The sales volume of electric vehicles is lower than expected; The rise in raw material / processing fees squeezed the gross profit margin.
