\u3000\u3 China Vanke Co.Ltd(000002) 245 Jiangsu Azure Corporation(002245) )
Events
The company recently announced that: 1) in 2021, it will realize revenue of 6.7 billion yuan / yoy + 57% and net profit attributable to parent company of 670 million yuan / yoy + 141%. 2) Sign major orders for lithium battery business.
Key investment points
The performance is eye-catching, and the three main businesses go hand in hand
In 2021q4, the company achieved revenue of 1.9 billion yuan / yoy + 35% / QoQ + 16%, net profit attributable to parent company of 165 million yuan / yoy + 62% / qoq-0.6%, and net profit attributable to non parent company of 126 million yuan / yoy + 40% / qoq-18%. The decline of the company’s 2021q4 profit was mainly affected by the superposition of asset impairment loss and asset disposal loss. In 2021, the company achieved a revenue of 6.7 billion yuan / yoy + 57% and a net profit of 580 million yuan / yoy + 215%, which was eye-catching.
In terms of business, 1) metal logistics and distribution: in 2021, the revenue is 2.7 billion yuan / yoy + 41%, and the gross profit margin is 15.5% / yoy-0.3pct; 2) Led business: revenue of 1.28 billion yuan /yoy+49% in 2021, gross profit margin of 14.7%/yoy+10pct; 3) Lithium battery business: in 2021, the revenue was 2.67 billion yuan / yoy + 85%, the gross profit rate was 28% / yoy + 4.7pct, the sales volume was 390 million pieces / yoy + 66%, the corresponding unit price was 6.85 yuan / yoy + 12%, and the net profit of Tianpeng power in 2021 was 531 million yuan / yoy + 99%, the corresponding profit of a single piece was 1.36 yuan / yoy + 20%. On the whole, all business lines of the company are showing a good trend, and the revenue side has achieved rapid growth.
The company’s R & D expenditure in 2021 was 340 million yuan, with a R & D expense rate of 5.1%, maintaining a high level of R & D investment. In 2021, the company’s net cash flow from operating activities was + 535 million yuan, and its operation was in good condition. On the whole, the balance sheet of the company is healthy, the profit continues to grow rapidly, and the collection quality is good.
Lithium battery orders are abundant and capacity expansion is accelerated
With strong demand, the company has increased its capacity layout. The company’s capital expenditure in 2021 reached 633 million yuan / yoy + 360%, and the company’s projects under construction at the end of 2021 reached 940 million yuan / yoy + 330%. With Zhangjiagang phase II 2021q4 put into operation, the company has 700 million lithium battery capacity. The capacity under construction and planning includes Huai’an phase I and phase II, with 2 billion ah each, totaling about 1.2 billion. It is expected that 600 million lithium batteries in Huai’an phase I will be put into operation in 2022q4 and 600 million lithium batteries in phase II will be put into operation in 2023. At that time, the company’s capacity will reach 1.9 billion lithium batteries.
The company has plenty of orders. In August 2021 and March 2022, Bosch and Stanley Agriculture Group Co.Ltd(002588) Baide signed orders respectively. Bosch agreed to purchase 87 million pieces from the company in 2022. Stanley Agriculture Group Co.Ltd(002588) Baide expects to purchase 120 million, 240 million and 280 million pieces from the company in 2022, 2023 and 2024, of which it can increase to no more than 200 million pieces in 2022. According to the company’s announcement, TTI, Baide, Bosch, Anhai and other major customers are expected to purchase 568 million cells from Tianpeng power in 2022, accounting for about 70% of the company’s effective capacity in 2022. We believe that the company has actively increased its capacity and accelerated its capacity planning. Its customers include global high-quality power tool giants, with abundant orders and high growth certainty.
Promote employee stock ownership plan, optimize governance and demonstrate long-term growth confidence
According to the company’s outlook for 2022, 1) in terms of lithium batteries, the company will actively increase its capacity expansion and increase the market share of electric tools. On this basis, the company will expand to the fields of clean appliances, bicycles and portable energy storage, and open up the second growth curve. The company expects the production of lithium batteries to exceed 700 million in 2022, and the sales volume will increase by more than 70%. 2) In terms of LED, the company will continue to adjust the product and customer structure, increase the proportion of backlight display products to more than 50%, and is expected to deduct non-profit of 50 million yuan in 2022. 3) Metal logistics and distribution, through intelligence and digitization, continuously optimize the service level and response speed, continue to maintain the dominant position in the traditional 3C field, and expand the share of high growth fields such as new energy vehicles and 5g communication equipment, so as to achieve orderly growth.
The company has carried out the second phase of employee stock ownership plan. By the end of February 8, 2022, the company has completed the bidding to buy 4.99 million shares, with a transaction of about 119 million yuan and an average price of 23.8 yuan / share. The lock-in period is 12 months, i.e. from February 9, 2022 to February 8, 2023. We believe that the company actively carries out continuous employee planning, optimizes corporate governance, binds excellent talents, increases R & D investment, has clear development ideas, and demonstrates medium – and long-term growth confidence.
Profit forecast
Based on the principle of prudence, the impact of additional issuance on performance and share capital will not be considered for the time being. It is estimated that the net profit attributable to the parent company in 2022, 2023 and 2024 will be 1 / 15 / 2 billion yuan, EPS will be 0.98/1.46/1.90 yuan, and the corresponding PE will be 24 / 16 / 12 times respectively. Based on the company’s high-quality track, we embrace high-quality customers such as Bosch and Stanley Agriculture Group Co.Ltd(002588) baide, with positive capital expenditure, which is in line with the future development trend, and the talent incentive is in place. We are optimistic about the company’s medium and long-term upward development opportunities and give it 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 are not as expected; The progress of additional issuance was less than expected.
