\u3000\u3 Shengda Resources Co.Ltd(000603) 659 Shanghai Putailai New Energy Technology Co.Ltd(603659) )
Key investment points
Event: Shanghai Putailai New Energy Technology Co.Ltd(603659) released the report for the first quarter of 2022. In the first quarter of 2022, the operating revenue was 3.131 billion yuan, an increase of 80% year-on-year; The net profit attributable to the parent company was 637 million yuan, a year-on-year increase of 90.28%; The net profit attributable to the parent company after deduction was 613 million yuan, a year-on-year increase of 96%.
Comments:
In 2022q1, the net profit attributable to the parent company increased by 90.28% year-on-year, and the profitability was further enhanced. The company achieved a revenue of RMB 3.131 billion in 2022q1, with a year-on-year increase of 80% and a month on month increase of 15.91%, mainly due to the rapid development of lithium battery industry driven by the demand of global new energy vehicle market. The company effectively met the market demand of lithium battery customers through perfect industrial chain layout and integrated business coordination, and the product sales of each business segment increased rapidly. In 2022q1, the net profit attributable to the parent company was 637 million yuan, with a year-on-year increase of 90.28% and a month on month increase of 22.95%, which was mainly due to the rapid growth of product sales in all business segments of the company. Through high graphitization self supply rate, coating diaphragm processing production efficiency and comprehensive material utilization, large-scale benefits gradually appeared and profitability was further enhanced. The gross profit margin in 2022q1 was 38.73%, up 0.96 PCT year-on-year and 3.71 PCT month on month; The net interest rate was 21.98%, up 2.71 PCT year-on-year and 1.95 PCT month on month.
The production capacity of negative electrode materials continues to expand, and the layout of integrated industrial chain shows advantages. Due to the dual control of local government energy consumption, power restriction and other factors, the graphitization capacity expansion and output improvement speed are lower than the market demand, the outsourcing processing price of graphitization in China continues to increase, the company’s cathode material business speeds up the integrated industrial chain layout, the self supply rate of graphitization is leading in the industry, and the competitive advantage is prominent. By the end of 2021, the company has formed an effective production capacity of cathode materials with an annual output of more than 150000 tons, including 110000 tons of graphitization processing and 100000 tons of carbonization processing supporting capacity. Sichuan Zichen 200000 ton anode material integration project has been started, of which phase I 100000 tons is expected to be put into operation by the end of 2022. It is expected that the negative electrode material industry will remain in a tight balance in 2022. The company’s negative electrode material business will benefit from the integrated layout and medium and high-end product positioning, and the business sector is expected to maintain high growth.
The construction of coating diaphragm business integration was accelerated. The company is the largest independent third-party diaphragm coating processor in China. In 2021, the processing volume of coated diaphragm reached 2.171 billion m2, accounting for 35.19% of China’s wet diaphragm shipments in the same period, with a year-on-year increase of 8.51 PCT and a significant increase in market share. By the end of 2021, the company has formed an annual production capacity of 100 million square meters of base membrane, 8000 tons of nano alumina and boehmite, 5000 tons of PVDF and 4 billion square meters of coated diaphragm. In addition, Jiangsu zhuogo 1.5 billion M2 coating processing project and Guangdong zhuogo phase I 2 billion M2 diaphragm coating project have been started; Sichuan ZhuoLe 400 million m2 base film and coating integration project is under construction; The domestic substitution of key coating materials and adhesive products will be accelerated, and the synergy of the integrated construction of coating diaphragm business will further appear.
The automatic lithium battery equipment business is in hand, with abundant orders. By the end of 2021, the company’s orders for coating machines on hand had exceeded 4 billion yuan (including tax), with a year-on-year increase of 170.33%, laying the foundation for the sustained and rapid growth of the company’s equipment business.
Investment recommendation: maintain the recommended rating. It is estimated that the company’s EPS in 2022 and 2023 will be 4.00 yuan and 5.80 yuan respectively, and the corresponding PE will be 34 times and 23 times respectively. The company has built an integrated industrial chain of lithium battery key materials and coordinated development of multiple businesses, which will fully benefit from the rapid growth of the global new energy vehicle market and maintain the recommended rating.
Risk warning. Risk that the production and sales of new energy vehicles are lower than expected; Price fluctuation risk of raw materials and outsourced processing; Market competition intensifies risks; Emerging technology or alternative product upgrade route
