Shantou Wanshun New Material Group Co.Ltd(300057) (300057)
Core view
Aluminum processing, paper packaging and functional film go hand in hand. The company’s main business includes paper packaging materials, aluminum plate, strip and foil processing and functional film manufacturing. Traditional paper packaging materials are mainly used for cigarette label, wine label, daily chemical and gift packaging; Aluminum plate and foil products cover food and beverage, cigarette, medicine and other packaging fields, and high-end products enter the fields of power battery plastic film and fluid collector at the same time; There are many kinds of functional films, including electronic touch screen conductive film, energy-saving film for construction vehicles, photovoltaic cell packaging high resistance film, etc. at present, the company has approved and developed the “process project of plating double-sided copper foil on organic carrier film”. In the future, the copper film business is expected to be industrialized to replace lithium battery copper foil. In 2020, the company’s revenues from aluminum processing, paper packaging and functional film were 2.56 billion yuan, 540 million yuan and 80 million yuan respectively.
Layout the battery aluminum foil in advance to fully benefit under supply constraints. 1) The company’s production capacity layout is at the leading level in the industry. The aluminum plate, strip and foil processing business has an aluminum plate and strip production capacity of 110000 tons and an aluminum foil production capacity of 83000 tons. The capacity under construction is 72000 tons of high-precision electronic foil, of which 40000 tons will be put into operation; There are 80000 tons of battery foil blank plate and belt, which is expected to be put into operation in 2023. 2) The demand for new energy vehicles, energy storage and consumer electronics has maintained a high growth for a long time. The sales of new energy vehicles maintain a high boom. We predict that the global power battery demand will be 429 / 553 / 748 / 1001 / 1335gwh from 2021 to 2025. Based on a conservative calculation of 400 tons of aluminum foil / GWH, the battery aluminum foil demand will be 17.2/22.2/29.9/40.1/534000 tons, and the CAGR will reach 33%. 3) Battery aluminum foil has high process requirements and long production capacity construction cycle. Battery foil has very high requirements for surface tension, thickness difference accuracy, surface quality, tensile strength and other indicators. It is very difficult to change the production of traditional aluminum calendering line. Many companies in the industry announced the expansion of production, and the new production capacity needs to introduce overseas rolling mill equipment, with a construction cycle of 28-40 months.
The release of new production capacity brings the inflection point of the company’s performance. The production capacity of 40000 tons of battery foil and 800 million tons of high resistance diaphragm invested by the company will be put into operation in the near future. The subsequent 32000 tons of battery foil, 80000 tons of battery foil blank and 50000 tons of double zero foil are expected to be partially put into operation in 2023. Through calculation, we predict that the sales volume of aluminum sheet, strip and foil of the company will be 16.1/18.7/209000 tons from 2021 to 2023, and the sales volume of battery foil will be 32 / 3.8/4600 tons. The processing cost of various types of aluminum sheet, strip and foil will remain stable. We predict that the net profit from 2021 to 2023 will be 47 / 261 / 341 million yuan and EPS will be 0.07/0.39/0.51 yuan respectively. At present, the share price for PE from 2021 to 2023 is 131.4/23.8/18.2 times, which is rated as “overweight” for the first time.
Risk warning: the installed capacity of battery is not as expected; Battery foil vehicle regulation certification is less than expected; Price fluctuation of raw materials.
