\u3000\u3 Guocheng Mining Co.Ltd(000688) 779 Hunan Changyuan Lico Co.Ltd(688779) )
The high increase in shipments and product upgrading led to the outbreak of performance. The company is a leading enterprise of ternary cathode. By the end of 2021, the company has a ternary precursor capacity of 30000 tons / year, ternary cathode material capacity of 80000 tons / year, and a small amount of lithium cobalt oxide cathode material and spherical nickel capacity. With the implementation of 40000 tons of ternary high nickel capacity and 60000 tons of lithium iron phosphate cathode capacity in phase II of the high tech base, we expect the total capacity of cathode materials (ternary + lithium iron phosphate) of the company to reach 180000 tons / year in 2023; The company focuses on the direction of high nickel, single crystal and high voltage, and the product structure is also gradually upgraded. Both volume and price rise together to drive the continuous growth of the company.
The cathode material industry is booming in supply and demand, ushering in an industrial boom. By 2026, the global demand for ternary cathode of power battery will be 1.27 million tons, and the demand for lithium iron phosphate cathode will be 1.48 million tons. The annual compound growth rate from 2021 to 2026 will be 34.2% and 38.3% respectively; The global demand for ternary cathode materials of energy storage batteries is 250000 tons, and the demand for lithium iron phosphate cathode is 720000 tons. The compound growth rate from 2021 to 2026 is 40.1% and 51.3% respectively. High nickel ternary positive electrode has advantages in economy and energy density. Downstream European and North American markets also form demand support for overseas ternary high nickel. High nickel is the main development direction of ternary positive electrode. The Sanyuan cathode leader actively expanded its production. In 2025, the total production capacity of the five enterprises with the highest market share will reach 852000 tons, with an annual compound growth rate of 24.6%; The lithium iron phosphate industry is expanding rapidly. After the entry of chemical enterprises, the industry ecology will be further enriched, and the market concentration is expected to show a downward trend.
Two core advantages create a new show of cathode materials: 1) excellent manufacturing technology and integrated layout build cost advantages for the company. In 2020, the cost per ton of ternary cathode was 93400 yuan / ton, 10.3% lower than the industry average of 104100 yuan / ton; 2) Independent R & D capability and high-quality customer resources build an enterprise moat. The company’s technical leaders have profound technical background and rich industrial experience, and the flexible and efficient market-oriented operation mechanism has promoted the improvement of R & D efficiency. The power lithium battery market is highly concentrated, and the company forms a deep binding with its key customer Contemporary Amperex Technology Co.Limited(300750) and the development of customers is expected to drive the development of the company.
Profit forecast and investment rating: the company is a leading enterprise of Sanyuan cathode. It is estimated that the company’s revenue in 2022 and 2023 will be 15.88 and 21.46 billion yuan, with a year-on-year growth rate of 132.1% and 35.2%, the net profit attributable to the parent company will be 1.40 and 2.02 billion yuan, and the EPS will be 0.73 and 1.04 yuan / share, with a year-on-year growth rate of 100.2% and 43.5%. We select ternary cathode enterprises Ningbo Ronbay New Energy Technology Co.Ltd(688005) , Beijing Easpring Material Technology Co.Ltd(300073) , Guizhou Zhenhua E-Chem Inc(688707) as comparable companies. From 2022 to 2023, the average PE of the company was 32.76x and 22.55x respectively, and the PE of the company was 25.41x and 17.71x. The PE of the company in 2022 and 2023 were lower than the industry average. Considering the high growth rate and good competitiveness of the company’s performance. For the first time, give a “buy” rating.
Risk factors: the production capacity launch process is less than expected, the price of raw materials fluctuates sharply, and the sales volume of new energy vehicles is less than expected
