\u3000\u3 Guocheng Mining Co.Ltd(000688) 772 Zhuhai Cosmx Battery Co.Ltd(688772) )
[key points of investment]
The company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company realized an operating revenue of 10.34 billion yuan (year-on-year + 48.5%), a net profit attributable to the parent company of 950 million yuan (year-on-year + 15.8%), and a net profit not attributable to the parent company of 840 million yuan (year-on-year + 7.1%); Among them, Q4 achieved an operating revenue of 2.69 billion yuan (year-on-year + 18.4%, month on month + 4.6%), and a net profit attributable to the parent company of 130 million yuan (year-on-year - 45.6%, month on month - 44.9%); In 2022, Q1 company achieved an operating revenue of 3 billion yuan (year-on-year + 32.2%, month on month + 12%) and a net profit attributable to the parent company of 51 million yuan (year-on-year - 80%, month on month - 61.3%).
The company's revenue is growing rapidly, and the rise in the price of raw materials suppresses profits. In 2021, the company's revenue of consumer batteries reached 9.87 billion yuan (year-on-year + 46.5%), mainly benefiting from the improvement of consumer battery production capacity and the increase of shipment. During the reporting period, the company's three and four factories in Chongqing were put into operation, and the company consumed 374 million cells in 2021 (year-on-year + 40.1%). In 2021, the company accounted for 27.2% (year-on-year + 3.5pct) of the laptop / tablet market, and realized the batch shipment of apple and Samsung and the realization of import substitution logic. On the profit side, the gross profit margin of the company's consumer battery in 2021 was 25.4% (year-on-year - 6.1%), which was mainly affected by the rise in the prices of upstream lithium, cobalt and other metals in the fourth quarter, and the relatively lagging adjustment of the company's selling price. The gross profit margin of the company fell to 22.1% in the fourth quarter of 2021.
In the first quarter, it was temporarily impacted by the price rise of raw materials, and the profit improvement can be expected with the gradual transmission of prices. In 2022q1, the company's revenue still maintained a high growth rate, but due to the rapid rise in the prices of upstream lithium, cobalt and other metals in the first quarter, the company's profitability was impacted to some extent. In 2021q1, the gross profit margin fell to 19% (mom-3.1pct), the net profit margin attributable to the parent fell to 1.7% (mom-3.2pct), and the expense rate during the period was 16.9% (mom + 2.3pct). The increase of expense rate during the period of the company is due to the beginning of accrual of equity incentive plan expenses, continuous increase of R & D investment and increase of management team personnel. In 2022q2, due to the continuous fermentation of the epidemic, the downstream demand of the company is expected to be impacted to a certain extent. With the gradual dissipation of the impact of the epidemic and the gradual transmission of the company's cost pressure to the downstream, the improvement of the business end can be predicted in the second half of the year.
The company plans to issue 3.12 billion yuan of convertible bonds and further upgrade its technology and equipment. The company plans to issue 3.12 billion yuan of convertible bonds for the construction project of lithium-ion battery lamination production line, the technical transformation and relocation project of Zhuhai production line, and the construction project of lithium-ion battery test and test center. Laminated battery has the characteristics of high energy density, stable internal structure and low internal resistance. The company's layout of advanced lamination production line in advance is conducive to enriching the existing product structure and assisting the subsequent excavation of potential customers; The Zhuhai production line technical transformation and relocation project includes the automatic upgrading of the production line and the introduction of pole ear middle technology, which will help to improve the production efficiency and product consistency of the company.
[investment suggestions]
Since the fourth quarter of 2021, the tight supply and demand of lithium carbonate has led to a unilateral rapid rise in the price side, while the company's selling price has not been transmitted in time, resulting in a certain suppression of profits. We expect that the tight supply and demand of lithium carbonate will continue in the next few years. Considering the continuous high price of lithium and the impact of the epidemic in the second quarter on the downstream demand of the company, we lowered our forecast for the net profit attributable to the parent company. With the company's subsequent gradual transmission of raw material prices to the downstream, the sales unit price of the company's products will increase. We raised our forecast for the company's operating revenue. It is estimated that the company will realize an operating revenue of 18.75/22.85/24.73 billion yuan from 2022 to 2024, a net profit attributable to the parent of 1.04/22.5/3.42 billion yuan, a corresponding EPS of 0.93/2.00/3.04 yuan / share and a corresponding PE of 27 / 13 / 8 times, maintaining the "buy" rating.
[risk tips]
The continuous fermentation of the epidemic has an impact on the downstream demand of the company;
The transmission of raw material price rise to the downstream of the company is less than expected.
