\u3000\u3 China Vanke Co.Ltd(000002) 245 Jiangsu Azure Corporation(002245) )
Key investment points
Event: the company released its annual report for 2021. The company achieved a total operating revenue of 6.68 billion yuan, an increase of 57.80% over the same period last year; The net profit attributable to the parent company was 670 million yuan, an increase of 141.09% over the same period of last year; Deducting non net profit of 583 million yuan, an increase of 215.11% over the same period of last year; The basic earnings per share was 0.6508 yuan, an increase of 129.8% over the same period last year.
The company shipped 390 million lithium batteries throughout the year. At present, it is in full production, and the impact of raw material price rise is small. Last year, the company shipped 390 million lithium batteries, with a year-on-year increase of 65.53%. At present, the company’s production capacity is still in full production. Due to the tight supply and demand of high-end rate battery products, the company’s product price transmission ability is strong, which is expected to transmit the impact of upstream raw material price rise during price adjustment.
The fixed increase has been approved. This year, the production capacity continues to expand rapidly, and the orders ensure the high growth of the company’s performance. The fixed growth of the company has been approved and plans to raise 2.5 billion yuan to invest in new capacity expansion. At present, Zhangjiagang phase II project has been put into operation and is about to reach full production, with a production capacity of 700 million. The first phase of Huai’an plant is expected to be put into operation in the third quarter of 22 years, and the production capacity will reach 1.3 billion after reaching the production capacity. The second phase of Huai’an plant is expected to be put into production next year, when the production capacity will reach 1.9 billion. The company has been recognized by downstream customers and has abundant orders on hand. Recently, the company announced that the orders for ternary cylindrical lithium batteries from 2022 to 2024 were 120 million, 240 million and 280 million respectively. For 2022, the upper limit can be increased to 200 million. Previously, the company announced that it had obtained 87 million Bosch orders in 2022. The revenue of the company’s two customers, Baide and Bosch, has achieved rapid growth in recent three years, which proves the company’s product technical strength and ensures the long-term and stable development of the company in the future. We believe that the supply and demand of high-end tools lithium battery is tight this year and next, adding to the company’s large capacity, the company will continue to have large customers signing long-term single locks in the future, and the company’s performance will continue to grow at a high speed in the future.
The second phase of the employee stock ownership plan completed the purchase, with an average transaction price of 23.8 yuan, demonstrating the internal confidence of the company. As of February 8, the company has completed the stock purchase of phase II ESOP through the secondary market, and has purchased 4990900 shares of the company, accounting for 0.48% of the total share capital of the company. The total transaction amount is 1187713 million yuan, and the average transaction price is 23.80 yuan / share. The participants of this plan are middle and senior managers and key employees, with a total number of no more than 250. The purchase price shows the company’s internal confidence in the company’s future.
Profit forecast and investment suggestions. The prospect of the company’s tool lithium battery industry is optimistic, the capacity expansion is accelerated, and the proportion of downstream giant customers is increasing year by year. The downstream application scenarios of high rate batteries have accelerated and the demand has increased rapidly. Based on the continuation of the current tension between supply and demand in the industry, we judge that the company’s profit margin will remain stable in the future. According to the expansion progress of the company’s production capacity, it is predicted that the company’s lithium battery shipment will reach 1.8 billion in 2024, the profit attributable to the parent company from 2022 to 2024 will be RMB 944 / 14.66 / 2072 million, and the compound growth rate of the company’s net profit attributable to the parent company in the next three years will be 47%. We maintain the target price of 31.50 yuan and maintain the “buy” rating.
Risk tip: the capacity expansion speed of lithium battery is lower than expected; The price of raw materials in the upstream continues to soar, and the transmission of product prices to the downstream is blocked; The LED industry as a whole continues to be depressed, and there is a risk that it will not be able to turn around its losses.
