\u3000\u3000 Ningbo Shanshan Co.Ltd(600884) (600884)
Event: the company issued the 2022 stock option and restricted stock incentive plan (Draft), which plans to grant a total of 70 million shares of equity to incentive objects, including 49 million stock options and 21 million restricted shares, accounting for 3.27% of the total share capital, and 445 incentive objects. The exercise price of stock options granted for the first time in the incentive plan is 28.18 yuan per share, and the grant price of restricted shares is 14.09 yuan per share.
Comments:
The coverage of the incentive plan and the performance evaluation objectives were much higher than expected. Stock options and restricted stocks granted for the first time accounted for 60% in the negative electrode material business department and 40% in the polarizer business department. In terms of performance evaluation, taking 21 years as the base, we predict that the net profit of the corresponding negative material business from 2022 to 2025 will be about RMB 990 million, RMB 1.59 billion, RMB 2.4 billion and RMB 3.3 billion respectively, with a year-on-year increase of 65% / 61% / 51% / 38%, and the net profit of the polarizer business will be about RMB 1.37 billion, RMB 1.56 billion, RMB 1.8 billion and RMB 2 billion respectively. The compound growth rate from 2022 to 2025 is expected to be 13%. This incentive plan demonstrates the company’s confidence in maintaining high-speed growth for a long time in the future and is expected to promote the rapid development of relevant businesses.
Lithium battery materials business ushered in a period of great development. In recent years, the company has made great efforts to develop lithium battery material business. According to xinlunxun, Shanshan anode has regained the first shipment of artificial graphite in 21 years and is a well deserved anode leader. At present, the supply of anode graphitization is tight. With the company’s Baotou project put into operation, the self supply rate of graphitization will be significantly improved, and it is expected to achieve both volume and price. After introducing the cathode business into BASF, a global chemical material giant, it actively expanded its overseas business and entered the fast lane of the power market.
Polarizer business has large domestic substitution space. The polarizer business of the company comes from the acquisition of LG’s assets. In the first half of 2021, its Shanjin optoelectronics company realized a net profit attributable to its parent company of 515 million yuan, with a significant profit contribution. With the gradual production of the new production line and the decline of import tax rebate and other costs, the domestic substitution of superimposed polarizer business will increase steadily in the future.
Profit forecast and investment rating: we expect the company’s revenue from 2021 to 2023 to be 24.472 billion yuan, 29.359 billion yuan and 36.543 billion yuan respectively, with a year-on-year increase of 197.9%, 20.0% and 24.5%; The net profit attributable to the parent company was 3.224 billion yuan, 3.345 billion yuan and 4.509 billion yuan respectively, with a year-on-year increase of 2236.2%, 3.7% and 34.8%. The current share price corresponds to 18.98, 18.29 and 13.57 times of PE from 2021 to 2023 respectively, maintaining the “buy” rating.
Risk factors: industry demand is less than expected risk; Price fluctuation risk of raw materials; Risks of new technology development.
