\u3000\u3000 Shenzhen Senior Technology Material Co.Ltd(300568) (300568)
Events
Shenzhen Senior Technology Material Co.Ltd(300568) (300568) recently released the performance forecast: it is expected to realize the net profit attributable to the parent company of 280-290 million yuan in 2021, yoy + 131% – 139%.
Key investment points
The performance is beautiful, and the profitability of Danping continues to improve
The company is a high-quality diaphragm supplier. It is expected to realize the net profit of non parent company deduction of 290-300 million yuan in 2021, yoy + 228% – 239%. It is expected to realize the net profit of non parent company deduction of 90-100 million yuan in 2021q4, QoQ + 0% to + 11%, with a year-on-year increase of 8-9 times. The performance is beautiful and in line with expectations. We expect the company’s sales volume to be about 1.1 billion square meters in 2021, corresponding to a single average profit of about 0.26 yuan, a significant increase from about 0.13 yuan / square meter in 2021. The average profit of the company in 2021h1 is about 0.22 yuan, while the average profit of 2021h2 is more than 0.3 yuan. If considering the impact of inventory impairment mentioned in 2021q4 bonus plan, the non performance deduction of the company is about 120 million yuan, corresponding to the average profit of 2021q4 is about 0.38 yuan, and the profit level shows a trend of continuous improvement.
The company has a significant position in dry process and continuous efforts in wet process. Through the optimization of product and customer structure, the supply and demand of superimposed diaphragm continues to be tight, and the product price will rise steadily; By improving yield and efficiency, the cost side also has room to decline. Looking forward to the future, we judge that the company’s single average profit is expected to continue to improve, the profit inflection point is clear, and has entered the medium and long-term upward channel.
Continue to expand production capacity and partner with global leading customers
The company has established production bases in Shenzhen, Changzhou, Nantong and other places in China, supporting global leading power battery manufacturers such as Ningde, Byd Company Limited(002594) , LGC and so on. In addition, the company has established a production base in Europe and Sweden to support high-quality customers such as northvolt. In terms of production capacity, the company’s dry and wet production capacity reached 1.6 billion square meters by the end of 2021 and is expected to reach 7 billion square meters by the end of 2025. In terms of orders, the company signed a six-year supply contract with northvol in March 2021, with an amount of no more than RMB 3.34 billion; In August 2021, the company signed a 4.5-year supply contract with LGC, with an amount of about 4.311 billion yuan. In terms of shipments, we expect the company’s shipments to reach 1.1 billion Ping / 1.7 billion Ping / 2.7 billion Ping in 2021 / 2022 / 2023, with good growth.
On the whole, the company actively layout its production capacity, accelerate the pace of global expansion, supply and serve the world’s leading customers nearby, and further strengthen the competitiveness of the company. In addition, overseas diaphragm suppliers are subject to cost pressure and expand production slowly, which is far from matching the downstream demand. Therefore, we believe that the advantages of Chinese diaphragm suppliers are prominent and seize the overseas market. Its market share is expected to continue to increase and the company will continue to benefit.
Excellent track cultivation and growth
The company takes technology as the core and customers as the center, deeply cultivates the lithium diaphragm golden track, and deeply covers high-quality application scenarios such as energy storage and electric vehicles. According to xinlune lithium battery, in 2021, China’s total diaphragm output was 7.9 billion Ping / yoy + 113%, accounting for more than 70% of the world. In 2021, China’s dry process output was 1.8 billion Ping / yoy + 68% and wet process output was 6.1 billion Ping / yoy + 132%. In 2021, the market share of the company in China was 14%, ranking the second, of which the dry process accounted for 21%, ranking the second, and the wet process accounted for 12%, ranking the third.
Overall, the company’s track has good growth, good competition pattern, high entry barriers and clear development path. The company’s capacity continues to expand and orders are abundant. It is expected to continue to benefit from the global energy revolution and highlight its excellent growth.
Profit forecast
Based on the principle of prudence, the impact of additional issuance on performance and share capital will not be considered for the time being. It is estimated that the net profit attributable to the parent company in 2021, 2022 and 2023 will be 285 / 701 / 1067 million yuan, EPS will be 0.37/0.91/1.39 yuan, and the corresponding PE will be 98 / 40 / 26 times respectively. Based on the company’s high-quality track, excellent customers, global capacity expansion and industrial layout in line with the future development trend, we are optimistic about the company’s medium and long-term upward development opportunities and give a “recommended” rating.
Risk tips
Policy fluctuation risk; Downstream demand is lower than expected; The product price is lower than expected; Risk of deterioration of competition pattern; Capacity expansion and digestion are not as expected; The progress of additional issuance was less than expected.
