\u3000\u3000 Cngr Advanced Material Co.Ltd(300919) (300919)
Event overview. The company has recently signed many cooperation agreements: 1) signed an agreement with Xiamen Xiangyu Co.Ltd(600057) : it is expected to obtain the supply of nickel and cobalt raw materials with an amount of about 80000 tons of nickel metal and 15000 tons of cobalt metal from 2022 to 2027. 2) Signed an agreement with Finnish Mining Group: it is proposed to build a high nickel ternary precursor production base with an annual output of no more than 120000 tons in hamina City, of which the annual output of phase I is 20000 tons, which is expected to be completed and put into operation in 2024, and the investment scale of phase I is about 1.44 billion yuan. 3) An agreement was signed with Kaiyang County to invest about 10 billion yuan to build an integrated production line of 200000 tons of iron phosphate and lithium iron phosphate materials per year through 33 months of construction.
The company is a leading company of ternary precursor, and high-quality customers bring barriers. In 21h1, the company shipped 70500 tons of ternary precursors and 11500 tons of cobalt trioxide. According to the estimation of Shanghai Nonferrous Metals network, the company’s market share of ternary precursors increased to 26% and that of cobalt trioxide increased to 25% in the first half of 2021, ranking first in the industry. The company’s customers cover LG, Tesla, Contemporary Amperex Technology Co.Limited(300750) , ATL, Samsung, Xiamen Tungsten Co.Ltd(600549) and other high-quality customers at home and abroad, bringing customer barriers; The company also has thousands of brand products, which can quickly respond to customer needs and have technical barriers.
Vertical expansion: rapid release of production capacity and upward profit per ton. We estimate that the company will ship more than 200000 tons in 21 years, and it is expected to reach 350000 tons and 500000 tons by the end of 22 and 23 years. The company’s single ton profit continues to rise. We estimate that it will reach 5000-6000 yuan / ton in 21 years and is expected to continue to rise in 22 years, mainly due to: 1) the proportion of high nickel system continues to increase, and the proportion of the company’s 8-series products has increased from less than 10% in the past to about 35% in 21 years, which is expected to increase further in the future; 2) The company’s 60000 ton nickel resource project of huofa is expected to be implemented successively from the end of 22 to the beginning of 23. At the same time, the company also has the guarantee of nickel and cobalt recycling capacity in Guizhou and Guangxi, so as to increase the net profit per ton.
Horizontal expansion: enter LFP. On November 17, 2001, the company and Guizhou Industrial Fund (a fund subordinate to Guizhou Provincial Department of Finance) jointly increased the capital of wholly-owned subsidiaries Zhongwei new energy and Zhongwei Xingyang energy storage. After the capital increase, Cngr Advanced Material Co.Ltd(300919) held 52% of the shares in both companies. On December 1, 2001, the company signed a strategic cooperation framework agreement with Beijing Easpring Material Technology Co.Ltd(300073) to invest in the construction of iron phosphate, lithium iron phosphate and related phosphorus resource development and phosphorus chemical supporting projects with a total capacity of no less than 300000 tons / year in Guizhou. On December 10, 2001, the company signed an agreement with Kaiyang County to invest 10 billion yuan to build a 200000 ton iron phosphate and lithium iron phosphate material production line integration project. Pyrometallurgical LFP has something in common with the precursor production process. The company previously had some LFP patent layout and has comparative advantages in cost control and customer resources. With the help of Guizhou’s low energy cost and rich phosphate rock resources, it is expected to catch up from behind.
Investment suggestion: the company ranks first in the share of ternary precursor in the world, and its production capacity increases rapidly. The net profit per ton is expected to rise steadily with the trend of integration and high nickel. We expect the net profit attributable to the parent company to be RMB 1.174 billion, RMB 2.173 billion and RMB 3.343 billion from 2021 to 2023 (previously RMB 1.061 billion, RMB 1.703 billion and RMB 2.416 billion), with a year-on-year increase of 179%, 85% and 54% respectively, The current share price corresponds to 69, 37 and 24 times of PE from 2021 to 2023 respectively. Referring to CS Xinneng vehicle, the current pe-ttm is 99 times, maintaining the “recommended” rating..
Risk tip: the sales volume of new energy vehicles is lower than expected; The company’s capacity expansion progress is less than expected.
