Zhejiang Hangke Technology Incorporated Company(688006) (688006)
Event: on December 30, 2021, Zhejiang Hangke Technology Incorporated Company(688006) announced the fixed increase plan, which plans to increase the fixed increase to no more than 35 specific investors by no more than 2.3 billion yuan, including 1.3 billion yuan for the expansion of equipment in the back section, 300 million yuan for production intelligence and information transformation, 250 million yuan for the construction of overseas network layout, R & D and assembly manufacturing projects, and 420 million yuan for replenishing working capital.
Key investment points
RMB 1.3 billion is added to expand production and is optimistic about the high performance elasticity of the equipment leader in the rear section
The planned increase in production corresponds to the 145000 square meters (100000 square meters of production workshop & 45000 square meters of auxiliary building) announced by the company on October 21, corresponding to an annual output value of 2-3 billion yuan. We expect all to be put into operation by the end of 2022. (1) From the perspective of production capacity, we judge that the company's production capacity is about 3 billion yuan at the beginning of 2021, 4 billion yuan + at the end of 2021, and about 6-7 billion yuan after the planned increase and expansion project reaches the end of 2022. (2) From the perspective of shipment volume, we expect the company's shipment volume to be 3.5-4 billion yuan in 2021 and 5-7 billion yuan in 2022. Lithium battery equipment is the seller's market. Under the condition of short supply, we expect: (1) the company will accelerate the expansion of production and release the performance elasticity; (2) In 2022, the order structure of the company changed, and the proportion of overseas orders with high gross profit increased. Since the gross profit margin of overseas orders (gross profit margin of about 60%, the data source is the 2020 annual report) is significantly higher than that of Chinese orders (gross profit margin of about 40%), the order quality will accelerate to improve in 2022.
Overweight overseas layout and continue to pay attention to the landing of overseas orders
The company plans to invest 250 million yuan in overseas network layout (Germany, the United States, Poland, Japan and South Korea, etc.), mainly because the company's traditional major customers are overseas customers, and many Chinese battery factories have begun to build factories overseas. The company actively grasp the overseas expansion in 2022. In the past, the company had high profitability by binding overseas first-line battery plants for a long time. From 2020 to 2021, overseas orders were repeatedly affected by the overseas epidemic, and the landing speed was slightly slow. We expect that the expansion of overseas battery plants lags behind China. Subsequently, with the gradual landing of overseas high gross profit orders, Zhejiang Hangke Technology Incorporated Company(688006) profitability will be gradually repaired. Zhejiang Hangke Technology Incorporated Company(688006) the key customer LG New Energy announced on December 7, 2021 that it plans to raise about 12.8 trillion won (about 69.2 billion yuan) in the Korean stock exchange to expand the lithium battery capacity. In December 2021, LG new energy has obtained the preliminary review of listing. We expect LG new energy to be officially listed in early 2022 and start a large-scale production expansion.
Intelligent and information transformation improves production efficiency, and the company pays attention to improving profitability
The company invested 300 million yuan in the intelligent transformation and upgrading of the production workshop, which helps the company improve product safety and consistency, shorten the R & D and production cycle of the later equipment, improve the production R & D efficiency and further improve the profitability. According to the performance target of 2021 equity incentive plan launched by Zhejiang Hangke Technology Incorporated Company(688006) , the company focuses on the improvement of future profitability. The increase of net profit margin mainly comes from the following aspects: (1) since 2020q4, the power battery plant has entered the peak of production expansion, and the high-end equipment capacity is insufficient, Zhejiang Hangke Technology Incorporated Company(688006) as a leading equipment manufacturer in the future, its voice has been further improved; (2) In 2022, the company will accelerate the release of production capacity, bring down the cost rate due to the scale effect, and the net interest rate will continue to increase; (3) We expect that in 2022, the company's overseas high margin orders will accelerate the landing; (4) The company pays attention to the improvement of production and R & D efficiency
Profit forecast and investment rating: we maintain the company's net profit attributable to the parent company from 2021 to 2023 at RMB 377 / 789 / 1813 million, corresponding to the current dynamic PE of stock price at 115 / 55 / 24 times. Considering that the company is in the global battery factory industry chain and fully benefits from the subsequent expansion of overseas first-line battery factories, we maintain the "buy in" rating.
Risk tip: the downstream expansion is lower than the market expectation and the competition pattern changes.
