\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 884 Ningbo Shanshan Co.Ltd(600884) )
Events
Ningbo Shanshan Co.Ltd(600884) ( Ningbo Shanshan Co.Ltd(600884) ) announced: from January to February, the revenue was 3.2 billion yuan / yoy + 44%, and the net profit attributable to the parent company was 566 million yuan / yoy + 313%.
Key investment points
Focus on the dual main businesses of negative electrode and polarizer, and straighten out the logic of long-term development
The company streamlines its business, sells clothing, cathode and other businesses, focuses on the dual main businesses of cathode and polarizer, and straightens out the logic of long-term development. We believe that the negative pole business of the company is expected to enjoy the industry dividend and achieve rapid growth, while the polarizer business is expected to grow steadily, and the long-term space is still good.
Strengthen the integrated layout of negative electrode and actively expand production capacity. At present, the company has an effective negative electrode capacity of 180000 tons and a graphitization capacity of 94000 tons. Compared with 2021, the negative electrode capacity of 60000 tons and a graphitization capacity of 52000 tons in Baotou, Inner Mongolia are increased. The self-sufficiency rate of graphitization of the company is about 35% in 2021 and is expected to increase to more than 50% in 2022. The company plans to invest 8 billion yuan in Pengshan to build 200000 tons of graphitization integrated production capacity, of which 100000 tons of phase I production capacity is expected to be put into operation in 2022h2. At that time, the negative electrode capacity of the company will be increased to 280000 tons and the graphitization capacity will be increased to 194000 tons. We expect that the negative pole sales volume of the company will be about 100000 tons in 2021 and 180000 tons in 2022.
In terms of polarizers, the company has an existing production capacity of 150 million square meters and 6 under construction, including 2 in Guangzhou, 2 in Zhangjiagang and 2 in Jinyang, with a total production capacity of about 300 million square meters.
The performance is eye-catching and has entered the medium and long-term upward channel
In terms of customers, the company’s negative pole customers include ATL, catl, LGC, Yiwei, Guanyu, Byd Company Limited(002594) etc. the customers are of high quality and can grow in the long term. In terms of polarizers, the company’s customers include BOE, LG and Huaxing optoelectronics, covering the world’s mainstream customer groups. In 2021, the company is expected to realize the net profit attributable to the parent company of RMB 3.1 billion-3.4 billion, with a year-on-year increase of 21-24 times. It is expected to realize the net profit deducting non attributable to the parent company of RMB 1.7 billion-1.9 billion. We expect the profit of the company’s polarizer to be about RMB 1.2 billion and negative electrode to be about RMB 600 million in 2021. From January to February, the company achieved revenue of 3.2 billion yuan / yoy + 40% and net profit attributable to the parent company of 566 million yuan / yoy + 313%.
We believe that the company’s customers are high-quality, the status of negative electrode and polarizer is prominent, the company’s capital expenditure is positive, and the performance is expected to maintain medium and high-speed growth.
Launch equity incentive plan to demonstrate confidence in long-term development
The company launched an equity incentive plan to grant 70 million shares, including 49 million stock options and 21 million restricted shares. The grant price of stock options is 28.18 yuan / share and the grant price of restricted shares is 14.09 yuan / share. The first awarding objects include 260 people in the negative electrode department and 185 people in the polarizer business department, a total of 445 people, accounting for 7.44% of the employees at the end of 2021. In terms of performance assessment, based on 2021, the revenue growth in 2022, 2023, 2024 and 2025 shall not be less than 30% / 75% / 130% / 165% respectively. According to the assessment of sub sectors, the polarizer department is required to take 2021 as the base, with revenue growth of 17% / 44% / 72% / 84% and net profit growth of 14% / 30% / 50% / 67% respectively in 2022 / 2023 / 2024 / 2025; The negative pole department requires that based on 2021, the revenue growth in 2022, 2023, 2024 and 2025 will be 80% / 170% / 300% / 390% and the net profit growth will be 65% / 165% / 300% / 450% respectively.
Overall, the company’s equity incentive assessment objectives are clear, and the profit CAGR of polarizer + negative electrode from 2022 to 2024 is about 30%, with good growth. The company attaches importance to talents, gives great incentives to employees, and retains excellent employees. We believe that the company focuses on the dual main businesses of polarizer and negative electrode, and ensures the long-term development of the company in terms of production capacity, customers, technology and employee incentive.
Profit forecast
It is estimated that the net profit attributable to the parent company in 2021, 2022 and 2023 will be 3.33/31/4.1 billion yuan, EPS will be 1.53/1.45/1.91 yuan, and the corresponding PE will be 18 / 19 / 14 times respectively. Based on the company’s high-quality track and focusing on the dual main business of polarizer + negative electrode, we are optimistic about the medium and long-term upward development opportunities of the company and give a “recommended” rating.
Risk tips
Policy fluctuation risk; Downstream demand is lower than expected; The product price is lower than expected; Risk of deterioration of competition pattern; Capacity expansion and digestion were less than expected.
