Contemporary Amperex Technology Co.Limited(300750) (300750)
Event: 1) it is proposed to invest no more than 24 billion yuan to build phase VII to phase X of Sichuan Shidai Yibin base, and the construction period of the project shall not exceed 20 months from the commencement; 2) Signed the business agreement on supply and demand linkage and capacity guarantee with Zhejiang vision, which agreed to supply Zhejiang vision with power batteries totaling no less than 57 GWH from 2022 to 2026, and collect capacity deposit.
In 2025, the production capacity is planned to be 750gwh +, and the progress of production expansion is accelerated. The company plans to invest no more than 24 billion yuan in the construction of Yibin base phase 7-10 (corresponding to about 80gwh), and the progress of production expansion will be further accelerated. The effective capacity of the company in the first three quarters of 2021 is 106gwh. After the capacity under construction is put into operation, we expect the capacity to reach 220-240gwh by the end of 2021. The company’s production expansion is radical. Previously, it was determined to increase production by 135gwh, and the Guizhou base and Xiamen base have started one after another. We expect that the production capacity will exceed 400gwh by the end of 2022, and the annual effective shipment capacity will reach 300gwh +.
Due to the shortage of high-quality battery capacity, the deepening of customer binding is the general trend, and Ningde’s leading position is stable. Zhejiang vision is a holding subsidiary of Geely Holding Group. The company signed a business agreement on supply and demand linkage and capacity guarantee with it, which agreed to supply power batteries with a total of no less than 57gwh from 2022 to 2026, and charge a certain amount of capacity deposit. If the annual dimension is not completed, the defaulting party will pay liquidated damages. There is a shortage of high-quality battery capacity in the industry. Ningde is full of production and sales. Downstream customers sign a cooperation agreement with binding terms to lock the capacity of battery manufacturers in advance, and the voice of battery manufacturers is further enhanced.
Increase the layout of energy storage business and establish strategic cooperative relations with many companies. Recently, the company has established strategic cooperation relations with Eaton electric, Atlas sunshine power group, ZF group, China Construction and development group, China Huadian, national energy group, Three Gorges group, China building materials, Chinalco and other companies to carry out all-round and in-depth cooperation in energy storage, power system, unmanned mine, after-sales service and so on. 2021 is the first year of energy storage explosion. We expect the company to ship more than 15gwh. In 2022, we expect the shipment to reach about 50gwh, which will become an important growth point of the company.
The shipment is expected to double and the battery price is expected to rise strongly. We expect the profit to hit the bottom in the middle of next year. We expect that the company’s battery shipment in 2021 will be more than 120gwh, with a year-on-year increase of + 160%, including China Shipbuilding Industry Group Power Co.Ltd(600482) 80gwh, overseas power 20gwh, energy storage and two wheeled vehicles 15gwh +, and the shipment in 2022 is expected to exceed 240gwh, more than doubling for two consecutive years. In terms of profitability, the current period is the price negotiation window for battery manufacturers, and the expectation of battery price rise is strong. We expect that the price rise will fall to the ground in the first quarter of 2022, with a price increase of 10% +, which will effectively transmit the rise of lithium carbonate price. With the slowdown of the price rise of battery raw materials in the middle of next year, the inflection point of battery profit is clear.
Profit forecast and investment rating: considering that the downstream prosperity continues to exceed expectations and the leading advantages of the company, we expect the net profit attributable to the parent company from 2021 to 2023 to be RMB 11.7/24/37.5 billion, an increase of 109% / 106% / 56%, corresponding to PE of 118 / 57 / 37x, 80 times the target price of 824 yuan in 2022, maintaining the “buy in” rating.
Risk tip: the sales volume of electric vehicles is lower than expected, and the competition is intensified
