Hunan Zhongke Electric Co.Ltd(300035) (300035)
The production capacity is planned to exceed 350000 tons and advance into the "four major" ranks
The project is an integrated project of anode materials for lithium batteries with an annual output of 100000 tons, including the front and rear sections of anode, graphite chemical process and supporting facilities. The construction period of phase I 65000 ton integrated project shall not exceed 24 months, and the construction period of phase II 35000 ton integrated project shall not exceed 18 months. Up to now, according to the production expansion plan disclosed by the company, it is expected that by 2025, the production capacity of cathode finished products will reach 350000 tons / year (equity caliber 310000 tons), and the graphitization production capacity will reach 295000 tons / year (equity caliber 236000 tons). It has joined the "big four" ranks from the "three small" of cathode, and its competitive position will be further improved.
The second base area in Guizhou is laid out, and the energy consumption policy is inclined to new energy
The project is located in the digital economy industrial park of Guizhou Gui'an new area, which is the second base for the company to enter Guizhou Province, an area with high hydropower resources, following Gretel, a subsidiary of Guizhou Tongren. Local governments will actively assist in handling EIA Ability evaluation (priority guarantee) and other procedures to coordinate power resources and give priority to the production and operation of the company in seasonal power rationing. Guizhou is rich in hydropower resources. The early warning level of the progress target of reducing energy consumption intensity in the first half of the year is level 2, and the early warning level of the total energy consumption control target is level 3. The central economic work conference held from December 8 to 10 stressed that the new renewable energy and raw material energy will not be used It will be incorporated into the total energy consumption control, and the relevant energy consumption will be deducted according to the regulations for areas that exceed the consumption of renewable energy. The willingness and implementation of local governments to introduce new energy industry chain will be further strengthened, and the certainty of integrated production expansion will be stronger.
Short term supply and demand is still tight, and graphitization self supply rate is positively correlated with profitability
The current round of industrial expansion is expected to be released at least by the end of 2022, and the supply is still tight in the short term. The graphitization price has reached 24000-27000 yuan / ton, an increase of 11000 yuan / ton over the beginning of the month. The price of artificial graphite cathode has also increased accordingly, basically covering the cost pressure. The graphitization capacity of 45000 tons in Guizhou grete and 15000 tons in Sichuan Jineng is expected to be completed in 2022q1, or the profitability of the negative electrode will be improved.
Profit forecast and valuation
It is estimated that the net profit attributable to the parent company from 2021 to 2023 will reach RMB 378 / 834 / 1193 million, with a year-on-year increase of 131% / 121% / 43%, corresponding to pe61.5% 99 / 28.09/19.64x, maintaining the "buy" rating.
Risk statement
The production capacity did not meet expectations, the sales volume of electric vehicles was lower than expected, and the rise of raw materials / processing fees squeezed the gross profit margin
