\u3000\u3 China Vanke Co.Ltd(000002) 245 Jiangsu Azure Corporation(002245) )
Report guide
On March 2, it was announced that the company’s application for non-public offering of no more than 165 million new shares was approved by the CSRC; It was announced on March 7 that the company obtained the order of Stanley Agriculture Group Co.Ltd(002588) Baide and agreed to provide 120, 240 and 280 million ternary cylindrical lithium batteries from 2022 to 2024, of which the upper limit in 2022 is 200 million.
Key investment points
Major orders were obtained from international first-line enterprises, and the certainty of performance growth was enhanced
The company and Stanley Agriculture Group Co.Ltd(002588) Baide agreed that the basic supply volume from 2022 to 2024 will be 120 million, 240 million and 280 million respectively. Among them, for 2022, it can be increased to no more than 200 million with the consent of both parties. The specific unit price will be determined by both parties through negotiation according to the fluctuation of raw materials and other actual conditions. Previously, the company has obtained an order from Bosch, which agreed that the company would provide 87 million 18650 ternary cylindrical lithium batteries in 2022. The company estimates that the order amount is about 95.85 million US dollars. With strong competitiveness, the company has successfully entered the international first-line brand supply chain and established a long-term supply relationship. The acquisition of lithium battery orders is expected to be normalized.
The capacity expansion of lithium batteries was orderly, and the long-term foundation was laid for the raised investment industrialization project
The company expects that the new capacity of 300 million pcs in Zhangjiagang phase II will climb to about 90% by March 2022, and the 600 million pcs in Huai’an Plant Phase I is expected to be gradually put into operation by the end of 2022. At that time, the company’s capacity will reach 1.3 billion PCs, an increase of 82% year-on-year. According to the company’s fixed increase plan, the non-public fund-raising is planned to be no more than 2.5 billion yuan, which is mainly used for the industrialization project of high-efficiency new lithium-ion battery with an annual output of 2 billion ah and the industrialization project of high-efficiency new lithium-ion battery (phase II). It is expected that the raised and invested capacity will be gradually released in 2023.
The demand for electric tools is high, and the quality of high rate battery is leading
Jiangsu Tianpeng power, a wholly-owned subsidiary, is mainly responsible for the company’s lithium battery business. It is a leading manufacturer of ternary cylindrical power batteries, especially high rate batteries. Its products are mainly used in electric tools, electric bicycles, floor sweepers / vacuum cleaners. The downstream demand boom is high and the cost transmission is relatively easy. Its customers include Bosch, Baide, TTI Metabo and other international well-known brands and tool manufacturers in China’s first echelon, such as greebo, Dongcheng and Dayi.
Profit forecast and valuation
The company is a leading supplier of lithium batteries for electric tools in China, benefiting from the acceleration of domestic substitution. It is estimated that the net profit attributable to the parent company in 21-23 years will be 677 million yuan, 1104 million yuan and 1679 million yuan respectively. Regardless of the impact of capital dilution caused by fixed increase, the corresponding EPS in 21-23 years will be 0.65, 1.07 and 1.62 yuan / share respectively, and the PE corresponding to the current stock price will be 28, 17 and 11 times respectively.
Risk tip: the demand for electric tools is lower than expected, the price of lithium carbonate rises sharply, and the release of production capacity is lower than expected.
