\u3000\u30003 China Zhenhua (Group) Science & Technology Co.Ltd(000733) 00073)
Core conclusion
Event: the company released the annual report of 2021. The annual revenue was 8.258 billion yuan, a year-on-year increase of + 159.41%, the net profit attributable to the parent company was 1.091 billion yuan, a year-on-year increase of + 183.45%, the gross profit margin was 18.24%, a year-on-year increase of -0.98 PCT, and the net profit margin was 13.21%, a year-on-year increase of + 1.00 PCT; Among them, 2021q4 achieved a revenue of 3.086 billion yuan, a year-on-year increase of + 167.15%, a month on month increase of 41.39%, and a net profit attributable to the parent company of 364 million yuan, a year-on-year increase of + 202.16%, a month on month increase of + 29.62%. The performance is in line with expectations.
The production and marketing of the company’s main business products reached a new high, and the revenue increased significantly. In 2021, relying on the technology and market advantages accumulated in the field of cathode materials, the company’s core business scale continued to expand. In the 21st year, the company achieved a revenue of 8.066 billion yuan from lithium battery materials business, a year-on-year increase of + 167.66%, and a gross profit margin of 17.68%, a year-on-year increase of + 0.08 PCT; The output of lithium cathode materials was 49700 tons, and the sales volume was 47200 tons, a year-on-year increase of + 96.68%.
The company’s lithium battery material production capacity has further expanded, and its business at home and abroad has continued to develop. By the end of 2021, the company has built a production capacity of 44000 tons of lithium battery materials, and built 50000 tons of new lithium battery materials in Changzhou dangsheng phase II project and 20000 tons of new lithium battery materials in Jiangsu dangsheng phase IV Project in China to further expand the capacity scale. In addition, based on the needs of customers in the overseas market, in 21 years, the company completed the feasibility assessment of the European 100000 ton high nickel power cathode material production base project, and accelerated the implementation of overseas capacity layout.
Investment suggestion: it is estimated that the company will achieve revenue of 17.249/24.862/30.386 billion yuan from 2022 to 2024, net profit attributable to the parent company of 1.553/21.92/2.819 billion yuan, year-on-year + 42.4% / + 41.2% / + 28.6%, corresponding EPS of 3.07/4.33/5.57 yuan respectively, maintaining the “buy” rating.
Risk warning: price fluctuation of raw materials; Fluctuation of US dollar exchange rate; Covid-19 epidemic intensified.
