\u3000\u30003 China Zhenhua (Group) Science & Technology Co.Ltd(000733) 00073)
In the first quarter of 2022, the performance increased by more than 134% year-on-year. The company released the performance forecast for the first quarter of 2022, and it is expected to realize a net profit attributable to the parent company of 350400 million yuan, with a year-on-year increase of 134.58% – 168.09%; The net profit after deducting non recurring profits and losses was 320370 million yuan, with a year-on-year increase of 178.40% – 221.91%. The main reasons for the substantial growth of the company’s performance include (1) the continuous and rapid growth of orders from international and Chinese major customers in the first quarter and the full production line; (2) The company’s third-generation high nickel and ultra-high nickel and other new products are steadily in large quantities, and its profitability is further enhanced.
Overseas shipments are superimposed with high nickel volume, and the profitability of a single ton is expected to maintain a high level. The company deducted the median non net profit of about 345 million yuan in the first quarter. After deducting the profit of Zhongding high tech, it is expected that the net profit of positive material business will be about 335 million yuan, and the profit per ton of positive material will remain at a high level. On the one hand, the overall customer structure of the company is still dominated by overseas customers, and the transmission of processing fees and raw material price fluctuations of overseas customers is better than that of Chinese customers; On the other hand, since 2021, the company’s high nickel products have been continuously supplied to international high-end customers, and the volume has increased rapidly. At the same time, 9 series ultra-high nickel products have also been shipped. The application of ultra-high nickel materials is expected to reduce the hourly power cost of battery plants. It is expected that the proportion of high nickel products shipped by the company in 22 years is expected to continue to increase.
The products maintained full production and sales, and the high nickel production capacity expanded rapidly. The company’s cathode materials are of excellent quality, and the capacity utilization rate has been maintained at a high level. In 2021, when the 20000 ton capacity of Changzhou dangsheng phase I project is completed, the company will quickly reach the production capacity and realize full load operation, and the capacity utilization rate of cathode business will reach 112.9% in 2021; At the same time, the company quickly started the construction of 50000 tons of capacity in Changzhou dangsheng phase II and 20000 tons of capacity in Jiangsu dangsheng phase IV. it is expected that Changzhou phase II project will be gradually put into operation in the second half of 2022, and it is expected to continue to contribute to the increment after the new capacity is put into operation.
We predict that the company’s earnings per share from 2022 to 2024 will be 2.86 yuan, 3.86 yuan and 4.50 yuan respectively. According to the valuation level of comparable companies, we will give the company 30 times PE in 2022. The company’s reasonable total market value is 43.5 billion yuan, corresponding to the company’s overall target price of 85.90 yuan, and maintain the buy rating!
Risk tips
Downstream lithium battery demand is lower than expected; Technical route reform of power battery; Upstream raw material price fluctuations cannot be transmitted downward; The production capacity is lower than expected; Intensified industry competition, etc.
