Cngr Advanced Material Co.Ltd(300919) (300919)
event
Cngr Advanced Material Co.Ltd(300919) recent announcement:
1) Sign the investment agreement of Finnish precursor project with Finnish mining and its subsidiaries;
2) Sign the strategic cooperation framework agreement with Beijing Easpring Material Technology Co.Ltd(300073) ;
3) Signed the investment agreement of lithium iron phosphate integrated project with Kaiyang County Government.
Key investment points
The world’s leading precursor, with the first market share
The company is a global leader in precursors. The market share of ternary precursors of 2021h1 company is 26%, and that of Co3O4 is 25%, both ranking first in the industry. With strong product strength, the company has fully entered the world’s leading new energy vehicle enterprises and lithium-ion battery industry chain, including Tesla, LGC, catl, Samsung SDI, ATL, beiteri, BAMO, dangsheng, Xiamen tungsten, etc., and has built strong customer barriers and technical barriers.
We believe that the company embraces global core customers, reasonably increases leverage, develops equity and debt financing simultaneously, actively expands capital expenditure and production capacity, increases R & D investment, improves process level and seizes market share. The company’s customer development is expected to continue to exceed expectations and promote sales to maintain high-speed growth.
The performance is eye-catching, and the quantity and profit rise together
The company’s performance has shown rapid growth in recent years. The revenue has increased from 3.1 billion yuan in 2018 to 13.9 billion yuan in the first three quarters of 2021, and the net profit attributable to the parent has increased from 63 million yuan to 765 million yuan, showing eye-catching performance. The rapid growth of the company’s performance is due to the increase in volume and profit. The sales volume of precursors increased from 28100 tons in 2018 to about 130000 tons in the first three quarters of 2021, and the deduction of non single ton profit increased from 1600 yuan / ton to about 5500 yuan / ton.
We believe that the scale effect of the company is constantly reflected, and the profitability is expected to be gradually improved, driving the continuous optimization of the balance sheet. The company gathers excellent global partners and cooperates with sungeelhitech of South Korea, Qingshan of China and mining of Finland in the fields of recycling, nickel, precursors and so on. With the company’s 60000 ton nickel project gradually put into operation, the recycling industry continues to increase, the self-sufficiency rate of raw materials is improved, the scale effect is superimposed, and the product structure is upgraded, the company’s single ton profit is expected to continue to rise.
Capital expenditure overweight to meet strong demand
The company increased its capacity layout. In the first three quarters of 2021, the company’s capital expenditure reached 3.2 billion yuan, about three times that of 2020. The company has global capacity distribution in Hunan, Guizhou, Guangxi, Indonesia, Finland and other places. It is estimated that the precursor capacity of the company will exceed 200000 tons / 350000 tons / 500000 tons in 2021 / 2022 / 2023. In addition, the company continued to optimize the production capacity structure. On December 10, 2021, the company announced that it would cooperate with Kaiyang County Government to invest 10 billion yuan (including 5 billion yuan of working capital) to build 200000 tons of iron phosphate and lithium iron phosphate integrated project.
After this, the company achieved comprehensive coverage in the two golden tracks of electric vehicles and energy storage, and achieved comprehensive layout in the upstream nickel and other resource ends, precursors, iron lithium, recycling and other fields. We believe that the business layout of the company is clear. Focusing on the two core tracks of electric vehicles and energy storage, the company contributes to carbon neutralization, continuously reduces costs, increases volume and profits, and can continue to grow at a high speed.
Profit forecast
It is estimated that the net profit attributable to the parent company in 2021, 2022 and 2023 will be RMB 1.11/22/3.2 billion, EPS will be RMB 1.88/3.66/5.36, and the corresponding PE will be 83 / 43 / 29 times respectively. Based on the company’s high-quality track, we embrace Tesla, LGC, ATL, dangsheng, Xiamen tungsten and other high-quality customers, have positive capital expenditure, and the industrial layout is 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 statement
Policy fluctuation risk; Downstream demand is lower than expected; The product price is lower than expected; Risk of deterioration of competition pattern; The progress of additional issuance is less than expected; Capacity expansion and digestion were less than expected.
