\u3000\u3000 Cngr Advanced Material Co.Ltd(300919) (300919)
Summary of this issue:
Lithium positive electrode precursor is the leader, with strong performance growth. The company is a leader in China’s precursor industry. In 2020, the market share of ternary precursor of the company is 23%, and the market share of cobalt trioxide is 26%. From 2017 to 2020, the compound growth rate of revenue was about 59%, and the compound growth rate of net profit attributable to parent company was about 186%. In the first three quarters of 2021, the revenue reached 13.874 billion yuan, a year-on-year increase of 173.26%; The net profit attributable to the parent company was 765 million yuan, a year-on-year increase of 173.04%.
Ternary precursor industry Changpo thick snow, high nickel ternary is expected to accelerate the application. GGII predicts that the global ternary precursor market space will be 1.6 million tons in 2025, and the CAGR from 2021 to 2025 is 29%, which is a track with thick snow on Changpo. We believe that with the maturity of high nickel technology, high nickel has a certain cost performance advantage compared with medium and low nickel in terms of cost. In terms of structural innovation, the application of 4680 large cylinders is expected to boost the energy of ternary batteries. In the downstream market, the growth of demand for new energy vehicles in Europe and America is expected to drive the shipment of ternary batteries, and the application of high nickel ternary batteries is expected to accelerate.
The industrial chain business continues to expand horizontally and vertically. The company started from the ternary precursor business. While strengthening the ternary business in recent years, it set foot in the upstream of the ternary precursor horizontally and thickened profits; Vertically, it is expected to set foot in lithium iron phosphate materials and fully serve the downstream battery industry, which is expected to create a second growth curve.
Profit forecast and valuation. We expect the company to achieve revenue of 22.112, 43.683 and 63.328 billion yuan from 2021 to 2023, with a year-on-year increase of 197.2%, 97.5% and 45.0%, and net profit attributable to the parent company of 926, 2114 and 3.770 billion yuan, with a year-on-year increase of 120.4%, 128.3% and 78.3%. The current market value corresponds to 80.64, 35.32 and 19.81 times of PE from 2021 to 2023 respectively. The company is given a “buy” rating for the first time.
Risk factors: covid-19 epidemic and other factors lead to the risk that the global demand for new energy vehicles is lower than expected; Product technology route risk; The company’s capacity expansion is less than the expected risk.
