\u3000\u3000 Camel Group Co.Ltd(601311) (601311)
Events
On December 29, 2021, the company announced that Xiangyang Zhongsheng new energy, a wholly-owned subsidiary of Three Gorges power, had signed the EMC contract for distributed photovoltaic power station project with four subsidiaries of the company and the investment, operation and management contract for energy storage power station with two subsidiaries of the company.
Key investment points
Deep ploughing of low-voltage batteries for automobiles, and the leading market share continued to increase
The company has been deeply engaged in the field of automotive low-voltage lead-acid batteries for more than 40 years, and has profound channel advantages, technical advantages and cost advantages. In the 12V lead-acid battery industry, it has been the first in China and the fourth in the world for many years. 2021h1 company’s Chinese market sales volume is 16.29 million KVAh / yoy + 37%, of which the Chinese host supporting market share is 49%, and the maintenance and replacement market share is 25%. In 2021h1, the company’s overseas market revenue was 603 million yuan, with a year-on-year increase of 277%. We believe that the rapid growth of the company’s low-voltage battery mainly comes from: 1) the vehicle supporting market is changing from start-up battery to start-up and stop battery, and the carrying capacity and value of a single battery are increased accordingly; 2) The front loading market price is transmitted to the rear loading market, bringing greater incremental space.
Actively expand production and lay the foundation for growth. At present, China has a total capacity of 33.3 million KVAh in Xiangyang, Hubei, Turpan, Xinjiang, Wuzhou, Guangxi and Yangzhou, Jiangsu, and another Jieshou plant in Anhui is under planning; Foreign countries have 2 million KVAh capacity in phase I of Malaysia, and another 2 million KVAh capacity in phase II, 1 million KVAh capacity in the United States and 2 million KVAh capacity in Uzbekistan are in the planning and construction stage. According to the company’s plan, the company’s global production capacity will not be less than 60 million KVAh by 2025, nearly doubling compared with the end of 2021. We believe that the company actively expands its production to meet the downstream demand, so as to lay a good foundation for the rapid growth of the business and further improve the mayor’s rate in the future.
The layout of a variety of lithium batteries, energy storage into a new growth pole
The company is market-oriented and overweight the layout of lithium batteries to deal with the potential risk that lead-acid batteries are replaced by lithium batteries. At present, the company’s lithium battery products mainly include 12V / 24V / 48V and energy storage lithium batteries. In the automotive field, 12V lithium battery is used to replace 12V lead-acid battery, which is mainly used for high-end electric vehicles, and has been designated by BMW and Geely; 24V lithium battery is used for heavy truck parking air conditioner, which has been designated by Sinotruk Jinan Truck Co.Ltd(000951) , Shaanxi Automobile, Sany Heavy Industry Co.Ltd(600031) ; 48V is a transitional solution, mainly supporting Dongfeng Nissan.
In the field of energy storage, the company announced on December 29, 2021 that Xiangyang Zhongsheng new energy, a wholly-owned subsidiary of Three Gorges electric energy, has signed the EMC contract for distributed photovoltaic power station project with four subsidiaries of the company, and the investment and operation management contract for energy storage power station with two subsidiaries of the company. The cooperation agreement on photovoltaic and energy storage projects signed between the company and Three Gorges power on October 21, 2021 is progressing smoothly. The company signed a cooperation agreement with the Three Gorges power and agreed to provide 0.9gwh energy storage EPC service during the 14th Five Year Plan period. Aiming at China’s power generation side and overseas user side energy storage market, the company has 1GWh capacity, and plans to build another 5gwh capacity in 2023, with large flexibility.
We believe that the company’s traditional main business focuses on automotive low-voltage batteries, takes the lead in the layout of 12V lithium batteries, and obtains the first mover advantage in the field of high-end electric vehicles with its channel advantages, which is expected to maintain the company’s leading position in the field of low-voltage batteries. The layout of the energy storage field helps the company enter the trillion energy storage market, form a new growth pole and open a new growth path.
Lead acid and lithium battery recovery form a closed loop, highlighting the cost advantage
The company has a layout in lead recovery and lithium battery recovery. In terms of recycled lead recovery, the company has a total capacity of 860000 tons in Xiangyang, Hubei, Turpan, Xinjiang, Wuzhou, Guangxi, Jieshou, Anhui and Fengcheng, Jiangxi. After the completion of Anhui Jieshou phase II project, China will have a capacity of 1.01 million tons, and overseas recycling capacity in Uzbekistan and Malaysia is under construction. In terms of lithium battery recovery, it is expected that the company will build a capacity of 20000 tons by the end of 2022, and another 50000 tons of capacity is under planning.
We believe that at present, China’s renewable lead production capacity is in the stage of surplus, the issuance of licenses will be stricter in the future, and the factories that are not standardized and environmental protection is not in place will be phased out, and the production capacity will be concentrated in the leading enterprises. The company’s five major recycled lead plants in China, each with a radiation range of 500 km, have strong transportation cost advantages compared with other recycled lead enterprises, and superimpose the channel advantages formed by the company’s operation for many years, giving the company a greater competitive advantage and cost advantage in the field of recycled lead. The lithium battery recovery business of the company has formed a closed loop with the main business to ensure the stable supply of raw materials and guarantee the gross profit margin of the company and maintain steady growth.
Profit forecast
It is estimated that the net profit attributable to the parent company in 2021, 2022 and 2023 will be RMB 848 / 1020 / 1325 million, EPS will be RMB 0.72/0.87/1.13, and the corresponding PE will be 19.8/16.5/12.7 times respectively. Based on the significant competitive advantage of automobile low-voltage battery where the company’s main business is located, and overweight lithium battery is committed to the application in the field of energy storage, we are optimistic about the medium and long-term upward development opportunities of the company and give a “recommended” rating.
Risk tips
The policy is not as expected; Capacity expansion is less than expected; Downstream demand is lower than expected; The expansion of energy storage market was less than expected.
