\u3000\u3 China Vanke Co.Ltd(000002) 245 Jiangsu Azure Corporation(002245) )
The company’s main business is metal logistics products, lithium batteries and led. The company started with metal logistics materials. In 2011, it entered the LED field and began the dual main business model. In 2016, it acquired the equity of Jiangsu Tianpeng power supply Co., Ltd. and entered the field of lithium battery manufacturing. In 2021, the operating revenue was 6.68 billion yuan, an increase of 57.20% year-on-year; The net profit attributable to the shareholders of the listed company was 674 million yuan, a year-on-year increase of 142.50%; The deducted non net profit attributable to shareholders of listed companies was 587 million yuan, with a year-on-year increase of 217.24%.
The company has strong competitiveness in the field of electric tool batteries. China’s electric tool battery industry welcomes the development opportunity. As a leading enterprise, the company has benefited significantly and has strong competitiveness. 1) High rate performance products take the lead in making breakthroughs; 2) Excellent customer structure. 3) The pace is fast on products such as NCA and 21700. 4) The business has excellent horizontal expansion ability and is expected to build a second growth curve. 5) Power tool batteries are relatively less affected by the current round of rising prices of lithium carbonate and other raw materials.
In the era of Internet of things, the company’s lithium battery business has strong room for expansion. At present, the company’s lithium battery products are positioned in small power systems. At present, its business is mainly electric tool batteries. With the continuous expansion of downstream demand and the expansion of the company’s production capacity, it is expected to expand horizontally to the fields of electric bicycles, vacuum cleaners, medical devices and other fields, creating a second growth curve.
Led business adjustment and optimization, metal logistics business growth can be expected. 1) Led: after 2019, the LED industry has experienced capacity clearing. Since 2020, the company has implemented the strategic decision of “high-end products and high-end market route”, and continued to optimize the product structure and adjust the customer structure. In the first half of 2021, the average price of the company’s overall products continued to rise, and the gross profit margin increased to 13.75%, realizing the turnaround from loss to profit after deducting non performance. 2) Metal Logistics: the optimization and adjustment of equity structure of relevant companies were completed in 2020. In the first half of 2021, the business segment achieved a revenue of 1.197 billion yuan, a year-on-year increase of 58%.
Profit forecast and valuation. We expect the company to achieve revenue of RMB 9.916 billion and RMB 12.017 billion from 2022 to 2023, with a year-on-year increase of 48.4% and 21.2%, and the net profit attributable to the parent company of RMB 924 million and RMB 1.392 billion, with a year-on-year increase of 37.1% and 50.6%. The current market value of the company corresponds to 22.07 and 14.65 times of PE from 2022 to 2023 respectively. The PE of the company from 2022 to 2023 is smaller than the average value of the comparable company. Considering that the company is a leading enterprise of lithium battery for electric tools, it is given a “buy” rating for the first time.
Risk factors: the risk that the company’s capacity expansion is less than expected; Increased competition in the industry leads to the risk of declining profits and the risk of sharp fluctuations in raw material prices.
