\u3000\u30003 China Zhenhua (Group) Science & Technology Co.Ltd(000733) 00073)
Event overview. On April 10, 2022, the company released the performance forecast for the first quarter of 2022. The company expects to realize a net profit attributable to the parent company of RMB 350400 million in the first quarter, with a year-on-year ratio of 134.58% – 168.09%, a month on month ratio of – 3.7% – 10.0% compared with Q4 in the 21st year, and a net profit of RMB 320370 million after deducting non recurring profits and losses, with a year-on-year ratio of 178.40% – 221.91%, and a month on month ratio of 3.3% – 19.5% compared with Q4 in the 21st year.
Orders from major customers outside China continued to be in large quantities, and the production line was running at full capacity. Shipment volume: considering the capacity progress, we expect that the shipment volume of Q1 company in 22 years is basically the same as that of 21q4. The annual production capacity will reach more than 70000 tons in 22 years. With the addition of outsourcing production capacity, the production capacity utilization rate is expected to exceed 100%. In the long term, the production capacity of the company is planned to be close to 300000 tons. Shipment structure: the company’s overseas revenue in 21 years reached 2.7 billion yuan, accounting for 32.72%, and the overseas shipment volume was about 16800 tons, accounting for 35.56%. Its main customers include SK, LG, Yiwei and North American customers. The structure is high-quality, and the company carries out capacity layout in major overseas markets such as Europe and South Korea.
The high-end products are steadily in large quantities, and the profitability is further enhanced. The proportion of shipments of high nickel products of the company continues to increase. At present, high energy density ni83, ni88 and ni90 high nickel multi-element materials are sold in batches to overseas high-end customers. Ni93 and ni95 have completed international customer certification and continue to improve the mass production scale. The progress of high nickel products of the company leads the world. Net profit per ton: the net profit per ton deducted by the company in 21 years was about 17000 yuan / ton, and the net profit per ton in Q4 in 21 years was 20000 yuan / ton. We expect that the net profit per ton of 22q1 tons will remain at a high level. Due to the high technical barriers of high nickel products and the greater product value, with the increase of the proportion of high nickel products in shipments, the profitability per ton of the company’s products will be effectively enhanced.
The new integration is perfect, and LMFP + solid-state battery seizes the commanding height of the next technology. Integration: the company strengthened upstream and downstream cooperation and signed strategic cooperation agreements with SK, Finnish mining, Zhongwei and Huayou to ensure the supply of raw materials. LMFP: relying on the Mining Research Institute, the company develops high-performance LFP and LMFP materials for electric vehicles and high-end energy storage markets, and establishes an integrated layout with head precursor enterprises in phosphorus resources, phosphorus chemical industry, precursors and other links. Solid state battery: the company has completed the product development of solid-state lithium battery materials, and successfully imported Ganfeng, Weilan, Qingtao, Huineng and other solid-state battery customers to realize mass sales. Previously, the company announced that it would supply no less than 25000 tons of solid-state lithium battery materials to blue, laying the company’s leading edge in the field of solid-state batteries.
Investment suggestion: we estimate that the net profit attributable to the parent company from 2022 to 2024 will be RMB 1611 million, RMB 2309 million and RMB 2919 million, with a same increase of 47.7%, 43.3% and 26.4%. The current share price corresponds to 25, 17 and 14 times of PE from 2022 to 2024 respectively. Considering that the company is a leading enterprise of positive pole, the production capacity growth is accelerated, the new integrated layout is deepened, and the “recommended” rating is maintained.
Risk tip: the sales volume of terminal new energy vehicles is lower than expected; The speed of production expansion is lower than expected; Competition for cathode materials has intensified.
