\u3000\u3000 Shenzhen Dynanonic Co.Ltd(300769) (300769)
Event: in 2021, the company expects to realize a net profit attributable to the parent of RMB 760 million to RMB 830 million, deducting a net profit not attributable to the parent of RMB 730-800 million, reversing losses year-on-year. 21q4 company deducted the non parent net profit of 510-580 million yuan, reversing the loss year-on-year, with a chain comparison of + 381% – 447%, and the performance was much higher than expected.
Comments:
The inventory income of lithium carbonate and the high popularity of lithium iron phosphate drive the company’s net profit per ton. The company’s performance greatly exceeded expectations mainly due to: (1) the rapid rise in Q4 lithium carbonate price and the company’s low-cost inventory, which led to a significant increase in the company’s net profit per ton. It is estimated that the company’s net profit per ton of lithium iron phosphate positive Q4 is 17000 yuan / ton, with a month on month increase of more than 10000 yuan / ton. (2) The new capacity of lithium iron phosphate cathode of the company will be released, the new capacity of Qujing will be released in mid-2021, and 21q4 will contribute to the capacity increment. According to the data of xinlune lithium battery, the company’s output of lithium iron phosphate cathode is expected to be 90000 tons in 2021, and that of Q4 is expected to be 30000 tons, an increase of 10% over Q3. (3) Cost control and scale effect.
The company’s capacity layout is accelerated, bound to major customers and grow together. Qujing lintie and Qujing Defang phase I lithium iron phosphate cathode capacity will be gradually released in 2021, Qujing Defang phase II 40000 t / a will be put into operation in July 2021, and the company’s capacity will reach 120000 T / a by the end of 2021. Considering 80000 T / A in cooperation with Yibin Ningde, 100000 t / A in joint venture with Yiwei and 50000 T / A in subsequent independent implementation, up to now, the company’s total capacity of lithium iron phosphate cathode has been planned to reach 350000 T / A. In 2022, the tight supply and demand of lithium iron phosphate is expected to continue, the capacity scale of the company is expanded, and the profitability is expected to remain high.
The new phosphate positive electrode and lithium supplement reflect the company’s technical iteration ability and contribute to the second growth curve. On January 6, 2022, the company announced the production expansion plan of 330000 tons of new phosphate cathode materials, with a total investment of about 7.5 billion yuan. The construction will be completed within 24 months after obtaining the land. After the company expanded the production of 100000 tons of new phosphate cathode materials in September 2021, the company continued to increase the scale, and the industrialization of new products accelerated, reflecting the company’s differentiated technical advantages and iterative ability. In addition, 25000 tons of lithium replenishing agent expanded by the company in 2021 is expected to be put into operation in 2023q1.
Profit forecast, valuation and rating: Shenzhen Dynanonic Co.Ltd(300769) is a leading enterprise of lithium iron phosphate materials in China. Liquid phase lithium iron phosphate has long cycle life, low cost and differentiated products. It is a core supplier of Contemporary Amperex Technology Co.Limited(300750) and Eve Energy Co.Ltd(300014) lithium iron phosphate cathode materials, and will fully benefit from the rapid development of automobile electrification and energy storage industry. Considering the accelerated development of lithium iron phosphate industry and the gradual release of the company’s new production capacity, we raised the company’s net profit forecast for 2021-2023 to RMB 801 / 1450 / 1923 million (101% / 78% / 66%), corresponding to pe51 / 28 / 21x, maintaining the “buy” rating.
Risk tips: raw material price fluctuation risk, technical route change risk, policy risk and intensified competition risk.
