\u3000\u30003 China Zhenhua (Group) Science & Technology Co.Ltd(000733) 00073)
In 2022q1, the company made a profit of 387 million yuan, slightly exceeding the median value of the performance forecast. In the first quarter of 2022, the company achieved a revenue of 3.842 billion yuan, a year-on-year increase of 204% and a month on month increase of 24%; The net profit attributable to the parent company was 387 million yuan, a year-on-year increase of 159% and a month on month increase of 6%. In 2022q1, the gross profit margin of the company’s sales was 17.41%, a year-on-year decrease of 1.82pct and a month on month increase of 1.07pct; The net profit margin of sales was 10.07%, a year-on-year decrease of 1.73 PCT and a month on month decrease of 1.71 PCT. The year-on-year decrease in the company’s gross profit margin and net profit margin is mainly due to the increase in the base of material price rise. The month on month increase in gross profit margin was mainly due to the increase in the shipment of high nickel products, the optimization of product structure and the improvement of profits.
The company’s shipment increased rapidly, and the profit per ton increased slightly month on month. We expect that the cathode shipment of 2022q1 company will be about 16000 tons, with a month on month increase of about 7%; The price per ton is expected to be 233000 yuan, an increase of 17% month on month; The net profit per ton is about 220 Fujian Nanping Sun Cable Co.Ltd(002300) 0 yuan, an increase of nearly 1 Shenzhen Zhongheng Huafa Co.Ltd(000020) 00 yuan over 2021 and a slight increase over 2021q4. The company smoothly adjusted the price to transmit the cost pressure; The shipment of high nickel products above 8 series increased rapidly, and the product structure was optimized to improve profitability. The company is the main supplier of skon cathode materials and maintains close cooperation with AESC, northvolt and other battery enterprises. The proportion of the company’s overseas customers’ revenue is expected to increase to more than 65% in 2022. Under the epidemic situation in China, the company’s operation is only slightly affected by logistics factors. Customers are mainly overseas and the demand is still strong.
Looking forward to 2022, the company is expected to maintain a high growth trend. The company’s Changzhou phase II 50000 ton project is expected to be completed in the second half of the year, contributing to its performance, and the positive effective capacity is expected to reach 100000 tons in 2022 (including outsourcing). In terms of customers, the demand growth trend of overseas skon, AESC, northvolt and North American major customers remains high, and the cooperation between China Eve Energy Co.Ltd(300014) , China Innovation Airlines continues to deepen. In terms of nickel products, the company continuously optimizes the product structure and rapidly improves the delivery of nickel products. We expect that the sales volume of cathode materials of the company is expected to reach 90000 tons in 2022, with a year-on-year increase of more than 90%.
The company’s advanced technology has been rapidly distributed, and significant progress has been made in the research and development of a variety of positive electrodes. In terms of ternary cathode, the company’s reunited single crystal composite high nickel products have been introduced into high-end models of international customers, and the high-voltage solid and high-capacity ni95 products have been verified by international customers. The development of lithium rich manganese based products and lithium manganese iron phosphate of the company is progressing smoothly. The company has reached cooperation with Ganfeng lithium battery, Weilan new energy and other solid-state battery customers, and obtained the intention order of more than 25000 tons of solid-state battery materials of Weilan. The company takes the lead in the layout of new technologies and is expected to obtain a premium for new technologies.
Risk tip: the sales volume of electric vehicles is lower than expected; The production progress is less than expected; Demand for high nickel was lower than expected.
Maintain the “profit” rating and “investment” recommendation. The company’s overseas customers expanded production at a high speed, with strong certainty of customer demand throughout the year; The shipment of high nickel products increased rapidly, the product structure was optimized and the profit was thickened. Based on the marginal optimization of profitability brought about by the improvement of the company’s product structure, we raised the original profit forecast. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 1755 / 2311 / 3158 million (the original forecast was RMB 1352 / 1952 / 2879 million), with a year-on-year growth rate of 61 / 32 / 37%, diluted EPS of RMB 3.46/4.56/6.24 and corresponding PE of 17 / 13 / 9 times respectively, maintaining the “buy” rating.
