\u3000\u3 Guocheng Mining Co.Ltd(000688) 006 Zhejiang Hangke Technology Incorporated Company(688006) )
Key investment points
Event:
Announcement of listed company: the company recently received the notice of winning the contract. The contract project is Hungarian fixture machine and charging and discharging motor line 1-12, with an amount of US $61.79 million (excluding tax, equivalent to about RMB 393.42 million), and Yancheng fixture machine and charging and discharging motor line 1-12, with an amount of RMB 337 million (excluding tax).
Won the bid for lithium battery equipment orders totaling 730 million yuan for SK two factories, and made positive progress in overseas business
This time, the company received orders totaling about 730 million yuan (excluding tax) from two factories in Hungary and Yancheng, which is estimated to exceed 15% of the total order amount of the company in 2021, forming a particularly important contract. Sk on, a subsidiary of SK I, a major petrochemical company in South Korea, focuses on the power lithium battery business. In 2021, the global installed capacity was 13.1gwh, with a market share of 4.4%. It is the third largest power battery enterprise in South Korea after LG and SDI, with strong capital strength and contract performance ability. From 2019 to 2021, the company’s sales amount to sk on was RMB 0.8/1.1/0.9 billion respectively, accounting for 6.1% / 7.4% / 3.7% of the operating revenue of the current year.
Referring to the performance unlocking conditions of equity incentive, the compound growth rate of performance is expected to reach 34% from 2021 to 2025
In the company’s 2022 equity incentive plan, the performance unlocking conditions in 2022 and 2023 are the same as those in 2021 equity incentive plan, and the grant price is also the same as that in 2021 equity incentive plan. The two equity incentive plans grant the inertia of price and performance evaluation indicators, which shows the management’s confidence in the medium and long-term good development of the enterprise. Without considering the share based payment fees of previous equity incentives and referring to the performance unlocking conditions, the company’s performance is expected to be 7.4/14.1/14.7/1.64 billion yuan from 2022 to 2025, with a compound growth rate of about 34% from 2021 to 2025.
The expansion of overseas lithium battery production is expected to accelerate. The company plans to issue an additional 2.3 billion yuan to expand production and fully grasp the new market opportunities
Previously, the company announced that the total amount of funds to be raised by issuing shares did not exceed 2.312 billion yuan, of which 1.337 billion yuan was used to expand production, 303 million yuan was used to upgrade existing production capacity, and 252 million yuan was used to build overseas business network layout and basic R & D, assembly and manufacturing centers, which will alleviate the pressure of potential production capacity in the future and strengthen the layout of overseas business.
Orders in hand are full, orders from overseas customers are expected to be gradually implemented, and profits are expected to accelerate growth in the next year
In 2021, the company has full orders on hand, and the average profitability of orders is better than that in 2020. It is expected that the amount of new orders signed by the company in 2021 will exceed 5 billion yuan, which corresponds to the year-on-year improvement of profitability in 2022, and the performance is expected to accelerate growth this year and next year. LG, SK and other overseas customers are gradually starting equipment bidding. It is expected that LG will accelerate the pace of production expansion after listing and financing, and the company is expected to fully benefit as an important global supplier of back-end equipment.
Profit forecast and investment suggestions
It is estimated that the net profit of the company from 2021 to 2023 will be RMB 260 / 730 / 1.39 billion respectively, with a compound growth rate of 55%, and the corresponding PE will be 78 / 27 / 14 times respectively, maintaining the “buy” rating.
Risk tip: the sales volume of new energy vehicles is lower than expected; The risk that the contract cannot be fully performed.
