\u3000\u3000 Zhenjiang Dongfang Electric Heating Technology Co.Ltd(300217) (300217)
Electric heating industry leader, actively layout new track
Zhenjiang Dongfang Electric Heating Technology Co.Ltd(300217) was founded in 1992 and has been deeply engaged in the electric heating industry for more than 30 years. It has become a leading enterprise in the electric heating industry and has been selected into the list of specialized and new small giant enterprises in Jiangsu Province for four consecutive years. In recent years, the company has begun to layout the field of materials and new energy through endogenous and extension, and actively look for new profit growth points. At present, the company has formed four business segments: civil electric heater, polysilicon equipment manufacturing, optical communication materials and battery steel shell materials; Among them, polysilicon equipment manufacturing, electric heaters for new energy vehicles in civil electric heaters and battery steel shell materials are the layout of the company in the field of new energy. Through years of accumulation, they have gradually emerged and become the main growth engine of the company.
One of the new energy layout – polysilicon equipment manufacturing: the wave of silicon material production expansion has arrived, and the photovoltaic equipment business is rapidly expanding
With the advent of the era of double carbon policy and affordable Internet access, the demand for photovoltaic ushered in an explosion. Under the strong demand, the price of silicon material is high, and the wave of silicon material capacity expansion has arrived. The company mainly produces electric heaters and reduction furnaces for cold hydrogenation in polysilicon production. This year, it is expected that the new silicon material production capacity will be more than 500000 tons, and the corresponding market space will be about 3-4 billion. Therefore, it is optimistic that the high growth of the company’s performance this year and next year will continue. In terms of profitability, the gross profit margin of polysilicon equipment of the company in 2020 was 21%, slightly lower than that of the same line. With the influx of production expansion orders this year, the gross profit margin is expected to rise significantly in the future.
New energy layout II – electric heater for new energy vehicles: raised investment projects eliminate production capacity constraints and increase penetration rate, resulting in high prosperity of the industry
In 2021, the company raised 604 million yuan, mainly for the expansion of shovel type PTC electric heater and PTC electric heater of new energy vehicles. The performance and price level of the company’s new energy vehicle PTC electric heater have been recognized by customers, but subject to the annual production capacity of 250000 sets, the market share in 2020 is only 14%. With the further release of production capacity, the company’s production capacity will reach about 2 million sets by the end of 22, and the company’s market share is expected to increase significantly.
New energy layout No. 3 – new energy vehicle battery steel shell material: pre nickel plating import substitution, which can be expected in the future
At present, the company has China’s advanced pre nickel plating technology. It is one of the few enterprises in China that independently produce and manufacture pre nickel sectord battery steel shell materials using pre nickel plating technology. Although there is still a gap in individual indicators between pre nickel sectord battery steel shell materials and Japanese imported materials, the gap between them is no more than 10%. At present, the company has determined the process route for improving the quality of pre nickel sectord battery steel shell materials, and relevant equipment has also begun to be purchased. There is a great possibility to achieve a technological breakthrough in 2022. Overall, the power lithium battery materials business is expected to become a new performance growth point of the company after a period of time.
Profit forecast
It is predicted that the company’s revenue from 2021 to 2023 will be 2.86 billion yuan, 3.87 billion yuan and 4.44 billion yuan respectively, and the EPS will be 0.11, 0.20 and 0.30 yuan respectively. The corresponding PE of the current stock price will be 45, 25 and 17 times respectively, giving the “recommended” investment rating.
Risk tips
The development of air conditioning market is not as expected, the policy risk of new energy vehicle industry, the progress of raised investment projects is not as expected, the risk of sharp fluctuations in raw material prices, etc.
