\u3000\u3 Guocheng Mining Co.Ltd(000688) 005 Ningbo Ronbay New Energy Technology Co.Ltd(688005) )
Event: the company released its annual report for 2021. In 2021, the company achieved a revenue of 10.259 billion yuan, a year-on-year increase of 170.36%. The net profit attributable to the parent company was 911 million yuan, a year-on-year increase of 327.59%, and the net profit attributable to the parent company after deducting non capital was 808 million yuan, a year-on-year increase of 404.73%. Among them, the revenue of 21q4 was 4.008 billion yuan, with a year-on-year increase of + 176.62%, a ring increase of 50.72%, the net profit attributable to the parent was 362 million yuan, with a same increase of 263.81%, a ring increase of 59.08%, and the net profit attributable to the parent after deduction was 339 million yuan, with a same increase of 380.87% and a ring increase of 65.74%. In line with the previous performance express.
The profitability of high nickel ternary cathode was improved and the product structure was optimized. With the release of new production capacity quarter by quarter, the annual sales volume of Sanyuan cathode of the company was 52000 tons, doubling year-on-year, and 9 series ultra-high nickel products began to be shipped in batches. The gross profit margin of the company in 2021q4 was 16.67%, with an increase of 3.38pct and a ring increase of 2.04pct; The net interest rate of 2021q4 was 9.00%, with an increase of 2.21pct and a ring increase of 0.46pct. We calculated that the company’s non net profit deducted per ton in the whole year of 21 was about 15000 yuan / ton, realizing the simultaneous increase of volume and profit. The shipment volume of high nickel polycrystalline products kept leading in the market, and the proportion of single crystal high energy density products and ultra-high nickel products above 9 series increased.
The increase in the proportion of self supply of precursors drives profit growth and strengthens the layout of raw materials. In 2021, the sales volume of precursors increased by 200% year-on-year, and the self supply rate to the positive electrode increased to about 30%. The precursor sector turned losses into profits during the year, and the single quarter profit continued to improve. The new base will use a new generation of production line design and equipment system, and the single line capacity will be increased by another 30-40%. In terms of raw material layout, the company has established long-term cooperative relations with Ganfeng Lithium Co.Ltd(002460) , Yabao, Gem Co.Ltd(002340) , Tianqi Lithium Corporation(002466) , Zhejiang Huayou Cobalt Co.Ltd(603799) , etc.
Deepen strategic customer cooperation. In January 2022, the company announced a strategic cooperation agreement with Contemporary Amperex Technology Co.Limited(300750) and expected to purchase about 100000 tons of high nickel ternary cathode materials from the company in 2022. From 2023 to the end of 2025, Contemporary Amperex Technology Co.Limited(300750) will take Ningbo Ronbay New Energy Technology Co.Ltd(688005) as its primary supply of ternary cathode powder. At the same time, Farasis Energy (Gan Zhou) Co.Ltd(688567) , honeycomb energy, Weilai automobile, satellite blue battery and other important customers have also signed strategic cooperation agreements with the company one after another; Overseas customers include SK on, SDI, northvolt, ACC and saft. In the field of small power, the company cooperates with ATL, Tianpeng energy, etc
Customers have established cooperation. With the continuous improvement of product competitiveness, the customer structure of the company is gradually optimized. It is proposed to increase and expand production and improve the integrated layout of precursors and engineering equipment. The company’s high nickel production capacity has increased from 40000 tons / year at the beginning of 2021 to 120000 tons / year at the end of 2021, and the production capacity has been expanding. On March 29, 2022, the company issued a fixed increase plan, which plans to raise no more than RMB 6.068 billion for lithium battery cathode material expansion projects (100000 tons in Xiantao phase I, 34000 tons in Zunyi phase 2-2, 15000 tons in Zhongzhou phase 1-2, South Korea), 60000 tons of ternary cathode precursor projects, engineering equipment phase I projects and supplementary working capital.
Profit forecast, valuation and rating: the company’s production and sales of high nickel ternary cathode are booming, the proportion of self supply of precursors is increased, and the profit per ton continues to increase. Considering the high flexibility of the company’s capacity release in the next few years, the company’s 20222023e net profit forecast (up 19% / 9%) is raised, and the 24-year forecast is 2.041/29.34/3.833 billion yuan respectively, corresponding to PE 28 / 20 / 15x, maintaining the “buy” rating.
Risk warning: the installed demand of new energy vehicles is less than expected, the price of raw materials fluctuates, and the raised investment projects do not meet expectations.
