\u3000\u3000 Zhejiang Huayou Cobalt Co.Ltd(603799) (603799)
Event: the company released the performance forecast for 2021. It is estimated that the net profit attributable to the shareholders of the listed company in 2021 will be between 3.7 billion yuan and 4.2 billion yuan, with a year-on-year increase of 218% - 261%; The net profit attributable to the shareholders of the parent company after non deduction was between 3.79 billion yuan and 4.29 billion yuan, with a year-on-year increase of 237% - 282%. In the fourth quarter of 2021, the corresponding company realized a net profit attributable to shareholders of listed companies ranging from 1.23 billion yuan to 1.73 billion yuan, with a year-on-year increase of 157% - 262% and a month-on-month increase of 37% - 92%; The net profit attributable to the shareholders of the parent company after non deduction was between 1.47 billion yuan and 1.97 billion yuan, with a year-on-year increase of 197% - 297% and a month-on-month increase of 63% - 118%. Performance exceeded expectations.
High nickel cathode has finally become the main theme, and technical barriers help the company expand its profit space. Recently, the electronic information department of the Ministry of industry and information technology issued the specification conditions for lithium ion battery industry (version 2021), which requires that the energy density of energy type power battery shall be ≥ 180wh / kg and the energy density of battery pack shall be ≥ 120wh / kg. It puts forward higher requirements for the performance of lithium iron phosphate battery. In the future, it may mainly promote the elimination of some backward capacity of lithium iron phosphate, Guide upstream cathode manufacturers to transition to the ternary route with higher energy density. In addition, next year, there will be an installation wave of 8 series and above ternary positive electrodes at home and abroad. Ncm811, NCA and other products are carrying out certification or small-scale production. The downstream demand of high nickel ternary precursor manufacturers represented by the company is strong, forming an oligopoly market in the short term. The tight relationship between supply and demand is expected to help the company expand its profit space.
Indonesia leads in nickel resource planning, bringing more than expected profits. With the transition of ternary cathode material to high nickel route year by year, the nickel content of single ton precursor increases from 0.2 tons of ncm333 to 0.5 tons of ncm811. It is estimated that the global nickel demand will be about 4.5 million tons in 2025, an increase of about 70% compared with 2021, mainly driven by the demand for power batteries. In terms of breakdown, the supply of stainless steel raw materials such as ferronickel and electrolytic nickel is in surplus with the cycle. On the one hand, the demand for nickel sulfate for power batteries increases greatly, the supply will still maintain a structural shortage in 2022, and the price of nickel sulfate will remain at a high level. With the company's Indonesia wet nickel project put into operation and the supporting of Huayue laterite nickel ore hydrometallurgy project, the company is expected to thicken the profit of ternary precursor and ternary cathode through upstream layout.
The company has signed several strategic cooperation agreements to bind high-quality customers and further enhance the certainty of performance. Recently, the company has signed strategic cooperation with Beijing Easpring Material Technology Co.Ltd(300073) , Ningbo Ronbay New Energy Technology Co.Ltd(688005) , Farasis Energy (Gan Zhou) Co.Ltd(688567) respectively, and the company's precursor customers have been greatly optimized. The three agreements are expected to bind the precursor demand of more than 800000 tons in 2025, corresponding to the production capacity of 450gwh power battery, indicating that the downstream is very optimistic about the future development of the industry and the development of customers, and is willing to deeply bind with the company, The side reflects the downstream recognition of the company's product quality.
Profit forecast and investment suggestions. The company's copper and cobalt business will continue to contribute profits. At the same time, the integrated layout of the company's cathode business will be gradually improved to reduce costs and increase profits and further improve the company's profitability. The compound growth rate of the company's total revenue in the next three years is 41%. Considering that the company is the only target to realize the integrated production of cathode materials in the market, the "buy" rating is maintained.
Risk tip: the company's production capacity has not been released as scheduled; Exchange risk; Price fluctuation risk of copper, cobalt and other products; Downstream demand is less than expected risk.
