Zhuhai Cosmx Battery Co.Ltd(688772) (688772)
More than 20 years of deep cultivation of lithium battery, leading the global consumption of lithium battery. Founded in 2007, with 25 years of lithium-ion battery technology precipitation, industrial experience and customer base, the company has been in a leading position in the global lithium battery industry. The main products of Zhuhai Cosmx Battery Co.Ltd(688772) are consumer lithium-ion battery products, including batteries and packs. Downstream applications include laptops, tablets, smart phones, smart wearable devices, consumer UAVs, etc. According to the ranking of global soft pack lithium-ion battery shipments in 2020, the company ranks fourth in the world and is the only Chinese manufacturer to squeeze into the top five. In terms of the share of shipments in downstream application fields, the company ranked second in notebook computers and tablet computers, and fifth in smartphone lithium-ion batteries. With the acceleration of domestic substitution and the continuous expansion of application scenarios of intelligent devices, the performance of the company’s consumption of lithium-ion batteries will grow rapidly.
Cell + battery pack covers the whole industry chain, and its market share continues to increase. As the most critical and valuable component of lithium-ion battery, the manufacturing process of cell is complex and the entry threshold is quite high; The battery pack has relatively simple process and low added value. However, the difficulty of Zhuhai Cosmx Battery Co.Ltd(688772) extending from the cell to the downstream battery pack is obviously lower than that of the pack plant to the upstream cell. Through the integration of the whole industrial chain, the company can not only ensure product quality, improve yield, reduce cost and increase efficiency, but also provide integrated and perfect services for end customers and enhance customer stickiness. In the future, the company will continue to improve the whole industrial chain layout of cell + pack, strengthen the automatic production level and further improve the company’s market share.
Consolidate the market share of traditional consumer electronics and blossom everywhere in emerging markets. The lithium-ion battery market can be divided into consumer electronics, power field and energy storage field according to downstream applications. At present, consumer batteries and power batteries account for the main share, accounting for 31% and 48% respectively. Even though the shipment of traditional consumer electronic products such as mobile phones and laptops slows down, the popularity of 5g, the technology update iteration of smart devices and the gradual opening of relevant application scenarios have brought many opportunities to the consumer lithium battery industry. According to GGII’s prediction, the global consumption of lithium-ion battery shipments will be about 95 GWH by 2023, with a compound growth rate of about 7% in 2018-23. Zhuhai Cosmx Battery Co.Ltd(688772) as a leading enterprise in the consumption of lithium batteries, it is undoubtedly one of the preferred suppliers for emerging terminal equipment manufacturers. At present, the company has established long-term and stable cooperative relations with brands such as Dajiang, Bose and Facebook, and will focus on high-speed growth fields such as intelligent wear and UAV in the future.
Cut into the power battery supply chain and open the next incremental space. Under the background of global low-carbon and energy saving, driven by the high prospect of the new energy vehicle industry, power lithium-ion batteries have entered a rapid growth channel. In particular, China has made greater efforts to promote the development of the whole industrial chain of new energy vehicles, and domestic lithium battery brands have taken the lead in the international market. According to the statistics of GGII, the shipment of China Shipbuilding Industry Group Power Co.Ltd(600482) lithium ion batteries in 2020 was about 84.5gwh, accounting for 53% of the global power lithium ion battery shipment, with a year-on-year increase of 19% in 2019 and a compound annual growth rate of 38% from 2015 to 2020. The company actively develops power lithium-ion batteries. At present, its products are mainly used in electric motorcycles and automobile start and stop systems. It has reached cooperative relations with Haojue, Cummins and Zhonghua automobile. Power lithium-ion batteries are an important strategy for the company’s future development. It is expected to reach a new level within five years and bring performance increment to the company.
Profit forecast and rating: first coverage, buy rating. Zhuhai Cosmx Battery Co.Ltd(688772) is a lithium battery enterprise we are very optimistic about. In terms of cell capacity, it is second only to ATL in China. Compared with other battery manufacturers in China who started with pack packaging, its technology accumulation and competitiveness are more guaranteed. In the field of horizontal channels, it has achieved quite good share and market recognition in the field of large-size notebook and pad products, and has quickly cut into and laid out in the direction of mobile phone, wearable, power and energy storage. The replicability and expansion of the application field give the company sufficient growth space. In the vertical field, the company has launched layout in pack packaging and other fields before and after listing. In the future, it will not only continue to maintain cooperation with important back-end pack factories, but also realize the integration of its own cell + pack in some fields. Combined with the current market for charging performance (fast charging), power and energy storage driven by new energy and other new demand increments. The company’s future growth is multi-dimensional, multi-directional and composite. Coupled with the safety regulation moat of the battery industry itself, the next few years will be a good year of continuous growth. We estimate that the company’s profit from 2021 to 2023 is expected to reach RMB 1072 million, RMB 1492 million and RMB 1946 million The corresponding valuation values are 48.35, 34.74 and 26.64 times respectively, which are rated as buying by the company.
Risk tips: (1) the global economic downturn leads to lower than expected shipments of downstream consumer electronics; (2) the production of new production lines is lower than expected, and the development of new products is lower than expected; (3) the risk of sharp fluctuations in raw material prices.
