\u3000\u3 China Vanke Co.Ltd(000002) 709 Guangzhou Tinci Materials Technology Co.Ltd(002709) )
Event: Guangzhou Tinci Materials Technology Co.Ltd(002709) released the report for the first quarter of 2022. In the first quarter of 2022, the operating revenue was 5.149 billion yuan, an increase of 229.71% year-on-year; The net profit attributable to the parent company was 1.498 billion yuan, a year-on-year increase of 422.19%; The net profit attributable to the parent company after deduction was 1.495 billion yuan, a year-on-year increase of 427.01%.
Comments:
In 2022q1, the net profit attributable to the parent company increased significantly by 4 times year-on-year. Benefiting from the rapid development of new energy vehicle industry and strong demand from downstream customers of the company, the volume and price of lithium battery electrolyte products increased significantly in the first quarter of 2022, driving the company's performance to achieve high growth. The company achieved a revenue of RMB 5.149 billion in 2022q1, with a year-on-year increase of 229.71% and a month on month increase of 15.25%; The net profit attributable to the parent company was 1.498 billion yuan, a significant increase of 422.19% year-on-year and 128.81% month on month. The gross profit margin was 44.04%, up 9.71 PCT year-on-year and 14.96 PCT month on month; The expense rate during the period was 6.79%, with a year-on-year decrease of 3.83 PCT and a month on month decrease of 0.04 PCT; The net interest rate was 29.70%, up 11 PCT year-on-year and 14.74 PCT month on month.
Embracing the high prosperity of downstream, there is a strong demand for lithium battery electrolyte products. The lithium battery materials produced by the company are mainly lithium battery electrolyte and lithium iron phosphate as cathode material, benefiting from the continuous high boom of downstream new energy vehicles and energy storage industry. The continuous high growth of global new energy vehicle sales has driven the strong demand for lithium batteries. In 2021, the company began to sign long-term supply agreements with Contemporary Amperex Technology Co.Limited(300750) , LG and other customers, and signed strategic cooperation agreements with Tesla to bind high-quality leading customers at home and abroad. In terms of energy storage, the company's innovative products have been applied to 5g, iron tower and other energy storage markets, and the long-cycle lithium iron phosphate electrolyte has achieved mass production.
The integrated layout shows cost advantages, continues to expand production and improve competitive barriers. The company's production capacity of key raw materials supporting electrolyte and lithium iron phosphate, including lithium hexafluorophosphate, new lithium salt, additives, iron phosphate and spodumene concentrate, etc. With the high growth of the new energy vehicle market, the supply and demand of lithium hexafluorophosphate is tight, and the price continues to rise. The average price of 2022q1 is 2.6 times higher than that of the same period last year. The cost competitive advantage brought by the self supply of the company's core raw materials is prominent. At present, lithium battery material industry chain projects such as the new lithium battery material project with an annual output of 152000 tons, the lithium difluorosulfimide project with an annual output of 20000 tons, the electrolyte basic material project with an annual output of 62000 tons, the lithium battery material project with an annual output of 41000 tons (phase I) and the daily chemical basic material project with an annual output of 60000 tons (phase I) are being promoted, and the capacity expansion is expected to further improve the company's industrial chain integration system and consolidate the company's cost control ability.
Investment advice: maintain the recommended rating. It is estimated that the company's EPS in 2022 and 2023 will be 5.34 yuan and 6.63 yuan respectively, and the corresponding PE will be 16 times and 13 times respectively. The company is the leader of electrolyte, the integration of industrial chain highlights the competitive advantage and maintains the recommended rating.
Risk warning. Risk that the production and sales of new energy vehicles are lower than expected; Risk of sharp rise in raw material prices; Risk of product price decline; Market competition intensifies risks; Risk of product upgrading or substitution of emerging technology routes.
