\u3000\u3 Guocheng Mining Co.Ltd(000688) 006 Zhejiang Hangke Technology Incorporated Company(688006) )
Event: on April 11, 2022, the company announced that it had won the contract of skon Hungary and Yancheng project.
Key investment points
Over 700 million large orders from SK, an overseas head customer, have landed, and Zhejiang Hangke Technology Incorporated Company(688006) fully benefited from this round of large-scale production expansion: the company won the large orders for 24 lines of skon (SK subsidiary), totaling 730 million yuan, respectively: (1) Hungarian fixture machine and charging and discharging motor lines 1-12, with an amount of 61.79 million US dollars (excluding tax, equivalent to 394 million yuan); (2) Yancheng clamp machine, charging and discharging motor 1-12 lines, with an amount of 337 million yuan (excluding tax). We expect that SK will invite tenders for 150 lines in the future, with clear planning and orderly bidding. As the main supplier of SK back channel equipment (70% share), the company will fully benefit from SK’s large-scale expansion. (1) In terms of the scale of production expansion, from 2022 to 2023, the expansion scale of SK in Europe, the United States and China will not be less than 200gwh; (2) In terms of the pace of production expansion, in the first half of 2022, Hungary and China Yancheng soft clad lines (24 lines in total, the project won the bid), which are expected to be delivered in September; In the second half of 2022, American projects began bidding (50 lines), with a total of more than 70 lines in 2022; In the first half of 2023, the United States and Hungary will continue bidding, and in the second half of the year, the United States will conduct phase III bidding. It is expected that SK will expand its production of more than 70 lines in 2023. LG, a major overseas customer, is about to expand its production, and Zhejiang Hangke Technology Incorporated Company(688006) benefits the most from the main supplier of downstream equipment: on January 27, 2022, LG new energy was officially listed and will soon start a large-scale expansion. LG’s total production capacity in 2021 is 155gwh, including 70gwh in Europe, 62gwh in China, 18gwh in South Korea and 5gwh in the United States. It is planned to achieve at least 420gwh and increase 265gwh in 2025. According to the value of back channel equipment of 60 million yuan / GWH, the space of back channel equipment corresponding to LG’s new expansion of production is 15.9 billion yuan, Zhejiang Hangke Technology Incorporated Company(688006) in LG’s back channel equipment accounts for 70%, which will fully benefit from LG’s large-scale expansion of production.
Zhejiang Hangke Technology Incorporated Company(688006) equipment’s sea going planning is perfect and the global layout is started: in 2017 and 2018, the company began to layout overseas. In 2018, with LG’s construction of factories in Poland, the Polish factories have a complete organizational structure including sales, service, management personnel and foreign employees, including office buildings, warehouses and other supporting facilities. Constrained by the epidemic, the pace of production expansion in Europe and the United States has been dragged down since 2020. In 2022, the company will follow the rhythm of expanding production overseas after the outbreak of major customers, restart overseas layout, and focus on Europe and the United States, including expanding Polish factories and setting up German factories; Set up R & D company in Japan and South Korea branch; Establish equipment manufacturing plants in the United States.
In 2022, orders from outside China increased rapidly and the order structure continued to be optimized: from the perspective of orders, Zhejiang Hangke Technology Incorporated Company(688006) 2021, new orders exceeded 5 billion yuan, of which 70% (about 3.5 billion) were from China and 30% (about 1.5 billion) from abroad; According to the current order landing rhythm, we expect new orders to reach 8-10 billion yuan in 2022, and the proportion of foreign orders will increase significantly.
Profit forecast and investment rating: we expect the net profit attributable to the parent company from 2021 to 2023 to be RMB 256 / 789 / 1813 million, corresponding to the current dynamic PE of stock price of 79 / 26 / 11 times. Considering that the company is in the global battery factory industry chain, it fully benefits from the subsequent expansion of overseas first-line battery factories and maintains the “buy in” rating.
Risk tip: the downstream expansion is lower than the market expectation, and the competition pattern has changed.
