\u3000\u30 Jinzai Food Group Co.Ltd(003000) 14 Eve Energy Co.Ltd(300014) )
Eve Energy Co.Ltd(300014) is a leading lithium battery enterprise in the world, with rapid growth in performance. The company’s products include lithium primary batteries, consumer batteries and power energy storage batteries. Power energy storage has accumulated certain technical and customer advantages, and accelerated global supporting under capacity expansion. The demand for consumer batteries has increased rapidly, and the production capacity and shipment of cylindrical ternary batteries are expected to double. The demand for lithium is growing steadily, with the market share and profitability leading the industry. From 2016 to 2020, the CAGR of the company’s revenue and net profit attributable to the parent company were 37% and 60% respectively.
The high boom of electric vehicles continued, and the consumption and demand for lithium primary batteries increased steadily. In terms of power batteries, it is estimated that the CAGR of new energy vehicle sales in China and the world from 2021 to 2025 will be 28% and 33% respectively. Considering the continuous increase of single vehicle charging capacity, it is estimated that the installed CAGR of power battery in China and the world will be 43% and 44% respectively from 2021 to 2025. In terms of consumer batteries, according to the prediction of GGII, the CAGR of global lithium batteries for power tools from 2021 to 2026 is 22%; China’s two wheeled lithium battery shipments CAGR was 32%. In terms of lithium primary batteries, the bidding for smart meters of State Grid grew rapidly, and the demand for etc and TPMS increased steadily with the sales of new vehicles.
The company’s power storage shipments are expected to continue to increase, and the integrated layout helps to improve profits and market share. In 2021, Yiwei’s global power installed capacity was 7.5gwh, with a year-on-year increase of + 188%, accounting for 2.41%, ranking ninth in the world. It is estimated that the company will ship 13.7gwh of power storage energy in 2021, and it is expected to exceed 30 and 60gwh from 2022 to 2023, which will continue to double. Since 2021, the company has accelerated the joint venture with the upstream to distribute production capacity. Up to now, the company has distributed nickel cobalt lithium resources, ternary cathode, iron lithium cathode, cathode, diaphragm and electrolyte. The joint venture will have a certain cost advantage in selling products to Yiwei and its subsidiaries. In the next few years, the company is expected to continue to improve its profitability and market share by reducing costs.
Ternary column cuts into the global leading customer supply chain, and lithium primary battery is the leader in the Chinese market. By the end of 2021, the production capacity of 100 million weft ternary cylinders was 750 million, which is expected to increase to 1.5 billion in 2022. Sanyuan cylinder entered the TTI supply chain in 2018 and began large-scale shipment in 2019. In addition, the company is also the main supplier of Bosch and Baide in China. At present, the company has achieved batch shipment of 2.5ah and 2.0ah cylindrical batteries, and the technical level ranks in the forefront of the industry. The company’s lithium primary battery accounts for more than 70% of the market in China, and its strength continues to increase. It has become the leader of lithium primary battery in the world. From the perspective of the industry, the application scenarios in the future are also increasing.
Profit forecast and investment suggestions: it is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 2.920 billion, RMB 3.915 billion and RMB 6.369 billion respectively, with a year-on-year growth rate of 76.8%, 34.0% and 62.7%. The corresponding PE valuation is 46, 34 and 21 times respectively, and the “buy” rating is given for the first time.
Risk tip: capacity expansion is less than expected, customer development is less than expected, and the progress of upstream cooperation projects is less than expected.
