\u3000\u3 China Vanke Co.Ltd(000002) 741 Guangdong Guanghua Sci-Tech Co.Ltd(002741) )
Main business: PCB chemicals, extended layout, lithium battery recycling
The company is the leader of PCB chemicals in China. The production capacity of chemical reagents and PCB chemicals is 20000 tons and 50000 tons respectively.
In 2017, we will cut into the field of new energy and lay out the lithium battery recycling and cathode material industries. The design capacity of lithium battery materials is 26000 tons, and 10000 tons are under construction.
Lithium battery materials business opens a new chapter in the company’s growth
New energy vehicles + energy storage two wheel drive, lithium battery demand continues to burst. With the continuous growth of production and sales of new energy vehicles, the installed capacity of lithium iron phosphate power batteries in China increased by 172.7% year-on-year in January 2022. Meanwhile, driven by the development of wind power and photovoltaic, the installed capacity of electrochemical energy storage in China reached 3269.2mw in 2020, an increase of 91.2% year-on-year. Demand for lithium batteries continues to explode.
With the advent of peak season, the battery recycling industry has obvious advantages. Waste power batteries have great economic advantages. As of March 4, 2022, the quotation of lithium carbonate in China reached 495000 yuan / ton, a year-on-year increase of 496.4%. Under the condition that the price of new energy materials and the scrapped amount of power batteries continue to rise, the total scale of power battery recycling is expected to reach 107.43 billion yuan in 2030.
Lithium battery business focuses on recycling layout, and the company has multiple advantages. The company’s patented technology can directly prepare lithium iron phosphate cathode materials from waste lithium iron phosphate batteries, and the company has realized differentiated competition in the field of power battery recycling. At the same time, the company cooperates with car enterprises, battery factories and other parties to fully ensure the source of its own waste power batteries.
Benefiting from domestic substitution + stricter environmental protection, the leading position of PCB chemicals is stable.
The import substitution trend of PCB chemicals is obvious. The proportion of China’s PCB output value in the world has increased by 5.8 PCT in the past five years. Affected by China’s PCB import substitution, the market scale of PCB chemicals will continue to increase in the future.
The share of PCB chemicals will become more concentrated. There are environmental problems in the production of PCB electronic chemicals. In the future, the market share of PCB electronic chemicals will be concentrated to enterprises that can bear the cost of environmental protection.
As the leader of PCB chemicals in China, the company has obvious R & D advantages. In 2020, the total number of R & D personnel of the company is 208, and the R & D expense rate is about 5%, all according to the industry-leading level.
Investment advice
It is expected that the net profit attributable to the parent company in 2021, 2022 and 2023 will be 71.21/183.98/434.87 million yuan and EPS will be 0.18/0.47/1.11 yuan respectively, which corresponds to 115.12/44.56/18.85 times of PE share price on March 4, 2022. The company’s business scale is expected to grow rapidly and is rated “strongly recommended”.
Risk factors: the policy is less than expected, the sales volume of PCB chemicals is less than expected, and the production capacity release is less than expected.
