\u3000\u3 Guocheng Mining Co.Ltd(000688) 388 Guangdong Jiayuan Technology Co.Ltd(688388) )
The pioneer of high-performance lithium battery copper foil accelerates its growth under the high prosperity of the industry. The company was founded in 2001. Its main products are lithium copper foil and a small part of electronic copper foil. Through 20 years of deep development, the company has deeply bound the leader of power battery Contemporary Amperex Technology Co.Limited(300750) , consumer battery ATL, and the products continue to lead the progress of the industry. In 2018, the company took the lead in realizing the mass production of 6um copper foil. In 2020, the mass production of 4.5um copper foil began, and the product structure was continuously optimized. Benefiting from the explosion of downstream electric vehicles and energy storage demand, the company achieved a revenue of RMB 2.804 billion in 2021, with a year-on-year increase of 133.26%, and the net profit attributable to the parent company was RMB 550 million, with a year-on-year increase of 195.02%. In order to meet the needs of customers, the company accelerated the capacity expansion of Baidu, Ningde, Ganzhou and other bases, and acquired Shandong xinliyuan to expand capacity in 2021. We expect the company to continue to maintain a high growth trend from 2022 to 2023.
Lithium copper foil has a long production expansion cycle and large investment. The tight supply continues in 2022, and the processing fee remains high. On the demand side, we estimate that the global demand for lithium battery copper foil will be 71 / 103 / 1.5 million tons from 2022 to 2024, with an annual growth rate of 59% / 45% / 45%. On the supply side, due to the 10000 tons of lithium copper foil, the investment is 600700 million, and the cathode roller of the core equipment has not been fully domestic, it depends on imports, and the production expansion cycle exceeds 18 months. In 2021, due to the global effective supply of nearly 450000 tons of lithium battery, which is in short supply, the processing fee of lithium battery copper foil was increased by Dingli Corp.Ltd(300050) 00 yuan / ton in Q2 and Q4 respectively. The expansion of the industry in 2022 mainly comes from China’s leading companies. It will take time for the capacity construction and customer certification of new entrants. We calculate that the copper foil industry will still be in a tight supply balance in 2022, and the processing fee can remain high. We expect that in the second half of 2023, with the release of industrial capacity, the supply and demand pattern of copper foil industry will be reversed, but the leading competitive advantage is obvious, and we can still enjoy excess profits.
The capacity expansion was accelerated, doubled for two consecutive years, the proportion of ultra-thin copper foil was increased, and the product structure was optimized. In 2021, the company sold 28000 tons of copper foil, with a year-on-year increase of 74%, of which 18000 tons were shipped under 6um, with a year-on-year increase of 139%, accounting for 66%, with a year-on-year increase of 18pct, of which 4.5um copper foil accounted for about 20%, and the product structure was significantly optimized. By the end of 2021, the company has a production capacity of 41000 tons, including 21000 tons of Yanyang, 15000 tons of Baidu and 5000 tons of Shandong; In 2022, 5000 tons will be added to Shandong in 1H, 16000 tons will be added to zhongbaidu base in 2022, and 15000 tons will be added to Ningde in 2H. In addition, 40000 tons of production capacity is planned for Ganzhou base and 10000 tons are planned for Shandong. Therefore, we expect the company’s effective capacity to exceed 55000 tons in 22 years, which can be sold at full capacity, nearly doubling year-on-year, and reach 110000 tons in 2023. In terms of net profit per ton, in 2021, the company deducted 18000 yuan / ton of non net profit per ton of copper foil, with a year-on-year increase of 75%. We expect that the processing fee of lithium battery copper foil will remain high in 2022, and with the further optimization of product structure, there is room for a small increase in single ton profit; In 2023, the tight supply of the industry will be relieved. We expect that the processing fee will decrease slightly and the overall profit will be controllable.
Profit forecast and investment rating: we expect the revenue of 22-24 years to be 55.45/82.81/11.317 billion yuan, an increase of 97.76% / 49.34% / 36.66%, the net profit attributable to the parent company to be 1.054/15.88/2.099 billion yuan, an increase of 91.62% / 50.66% / 32.21%, corresponding to pe14x / 9x / 7X, 25 times PE in 2022, corresponding to the target price of 112.5 yuan, and a “buy” rating for the first time.
Risk tip: the sales volume of new energy vehicles is lower than expected, the product price decreases, and the price of raw materials fluctuates.
