\u3000\u3 China Vanke Co.Ltd(000002) 709 Guangzhou Tinci Materials Technology Co.Ltd(002709) )
Key points
Event 1: on the evening of April 14, the company released the first quarter report of 2022. During the reporting period, the company achieved a revenue of 5.149 billion yuan, an increase of 229.71% year-on-year and 15.25% month on month; The net profit attributable to the parent company was 1.498 billion yuan, a year-on-year increase of 422.19% and a month on month increase of 128.81%; The net profit attributable to the parent company after deduction was 1.495 billion yuan, a year-on-year increase of 427.01% and a month on month increase of 126.92%.
Event 2: on the evening of April 14, the company issued an announcement on investing in the construction of iron phosphate project with an annual output of 300000 tons (phase II). The company plans to invest and construct the phase II project through the holding subsidiary Yichang Tianci, which is located in the west of Jianglin road and the south of Gangsheng Road, yaojiagang chemical park, Zhijiang City, Yichang city. The total investment of phase II project is 1.005 billion yuan. After being completed and put into operation, it is expected to achieve an average annual operating revenue of 2.248 billion yuan and an average annual net profit of 227 million yuan. The construction period of phase II project is 9 months.
Event 3: on the evening of April 14, the company issued the plan for public issuance of convertible corporate bonds. The company plans to raise a total of no more than 3.466 billion yuan (including this amount) for 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 ion battery material project with an annual output of 41000 tons (phase I), the daily chemical basic material project with an annual output of 60000 tons (phase I) and supplement working capital.
Comments:
The amount of electrolyte increased at the same time, and the company’s performance in the first quarter exceeded expectations: benefiting from the high prosperity of the lithium battery industry, combined with the increasingly perfect integrated industrial chain layout, cost reduction in scale and excellent cost control ability, the company’s profitability has been improved again since 2022. The company’s leading position in lithium battery materials is stable, its lithium battery electrolytes, additives and other products continue to be in large quantities, the self supply proportion of raw materials continues to increase, and the profitability of terminal electrolyte products is significantly enhanced. At the same time, the electrolyte market demand continued to improve, and the company’s electrolyte product volume rose simultaneously, providing strong support for performance growth. The price of electrolyte continued to rise from January to March 2022. Although the price has decreased since April, it has remained high on the whole. According to the data of Baichuan Yingfu, the average market price of Q1 electrolyte in 2022 was about 118000 yuan / ton, up 3.8% month on month and 145.5% year-on-year.
The company keeps expanding the production of all products to ensure long-term growth capacity: in terms of lithium battery materials, the layout of lithium battery electrolyte and core raw materials is relatively perfect, and the company leads the industry in terms of market share, process and cost. At present, the company is still increasing the supply capacity of various products and ensuring sufficient capital supply during capacity construction. By the end of 2021, the company has a capacity under construction of 800000 tons of electrolyte. At present, the company has a fixed hexafluoride production capacity of 32000 tons / year, and the planned and under construction liquid hexafluoride production capacity of 440000 tons / year. At present, the company has a production capacity of 2300 tons / year of lifsi, and now it is raising funds to build 20000 tons / year of lifsi. The production capacity is planned to exceed 60000 tons in the next three years. The capacity expansion of lithium battery products is an important step in the company’s in-depth layout of industrial chain integration, which can create a large cost reduction space for the company, and can increase profits with the gradual production of new capacity in the future. At the same time, the company’s daily chemical materials and special chemicals business grew steadily, with rich product types and stable expansion of production capacity. Both businesses go hand in hand and are optimistic about the long-term growth of the company.
Seize market opportunities and continue to develop iron phosphate business. Iron phosphate is the core raw material for the production of cathode material lithium iron phosphate. The downstream demand continues to be strong. At present, there is still a certain capacity gap in the market. Seizing this market development opportunity and relying on its own high-quality production technology, the company continues to strengthen the strategic layout of iron phosphate products and expand its production and operation scale. At present, it is in the development period of iron phosphate business. At present, the company has a capacity of 30000 T / a battery grade iron phosphate. It is planned to build a 100000 ton lithium iron battery recycling project, corresponding to 25000 tons of iron phosphate, which is expected to be completed in 2023. At the same time, 100000 tons of phase I of the 300000 ton iron phosphate project planned and constructed by the company in Yichang is expected to be put into operation in 2022. Now, the capacity layout of phase II is increased. The significant expansion of iron phosphate production capacity is expected to contribute considerable income to the company, stabilize the company’s leading position in the new energy industry and improve market competitiveness
Profit forecast, valuation and rating: benefiting from the increase in the volume and price of the company’s lithium battery materials and the enhancement of the company’s self supply capacity of raw materials, the company’s profitability has been significantly improved, and the performance of 2022q1 exceeded expectations. With the continuous expansion of the company’s production capacity and the high prosperity of the industry, the company’s performance is expected to maintain rapid growth. We raised the company’s profit forecast from 2022 to 2024. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 50.04 (up 8.1%) / 59.20 (up 8.3%) / 6.836 (up 8.4%) million yuan respectively, maintaining the company’s “buy” rating.
Risk tips: production capacity construction risk, product price fluctuation risk, downstream demand less than expected risk.
