\u3000\u30003 China Zhenhua (Group) Science & Technology Co.Ltd(000733) 00073)
22q1 revenue and net profit reached a single quarter high. On April 26, 2022, the company released the first quarterly report of 2022. In 22q1, the company achieved a revenue of 3.84 billion yuan, an increase of 204% and 24.5% respectively, a net profit attributable to the parent company of 387 million yuan, an increase of 159% and 6.5% respectively, and a net profit of 351 million yuan after deducting non recurring profits and losses, an increase of 206% and 13.4% respectively, all above the average value of the previous performance forecast range. The non recurring profit and loss is 36 million yuan, of which the profit and loss from changes in fair value such as Hunan Zhongke Electric Co.Ltd(300035) shares and forward foreign exchange settlement is about 24 million yuan, and bike’s arrears are recovered by 11 million yuan.
Profitability remained high and cost control was excellent. Gross profit margin: the company’s 22q1 gross profit margin was 17.4%, with a decrease of 1.8pcts and a ring increase of 1.1pcts; Net interest rate: the net interest rate of 22q1 was 10.1%, with a decrease of 1.7pcts and a ring decrease of 1.7pcts. Expense rate: during the period of 22q1, the expense rate was 6.8%, down 1.1pcts at the same time, with a ring increase of 1pcts, of which the expense rates of sales, management, finance and R & D were 0.3%, 0.7%, – 0.1% and 5.9% respectively, with a year-on-year change of – 0.6, – 2.3, + 0.9 and + 1.0pcts. Among them, the increase of financial expenses is mainly due to the increase of exchange loss, while the increase of R & D expenses is due to the increase of R & D investment and the sharp rise of raw material prices, resulting in the corresponding increase of R & D and trial production expenses. Inventory: at the end of 22q1, the inventory was 2.15 billion yuan, an increase of 49.5% month on month. The price of raw materials increased and the amount of inventory increased. Net cash flow from operating activities: 22q1 was 185 million yuan, an increase of 159% at the same time, mainly due to the significant increase in international sales and the year-on-year increase in the settlement amount of export dollars.
The shipment is upward, and the net profit per ton is at a high level. Considering the rhythm of capacity release, we expect the company’s 22q1 shipment to be the same as 21q4, reaching about 15000 tons, and the net profit per ton will remain at a high level. The proportion of high nickel products shipped by the company continues to increase. At present, high energy density ni83, ni88 and ni90 high nickel multi-element materials are sold in batches to overseas high-end customers. Ni93 and ni95 have completed international customer certification and continue to improve the mass production scale.
Sign a contract with Lishen to lock in demand. On April 25, the company signed a strategic cooperation agreement with Lishen, with a total of 100000 tons of cathode materials. The company has strong customer diversity and relatively high quality, including overseas customers such as SK, Murata, North American car factory and LG, as well as Chinese customers such as Yiwei and Lishen.
The new integration is perfect, and LMFP + solid-state battery seizes the commanding height of technology. Integration: the company strengthened upstream and downstream cooperation and signed strategic cooperation agreements with SK, Finnish mining, Zhongwei and Huayou to ensure the supply of raw materials. LMFP: relying on the Mining Research Institute, the company develops high-performance LFP and LMFP materials for electric vehicles and high-end energy storage markets, and establishes an integrated layout with Zhongwei in phosphorus resources, phosphorus chemical industry, precursors and other links. Solid state battery: the company has completed the development of solid-state lithium battery materials and successfully imported Ganfeng, Weilan, Qingtao, Huineng and other customers to realize mass sales. Previously, the company announced that it would supply no less than 25000 tons of solid lithium battery materials to blue.
Investment suggestion: we estimate that the net profit attributable to the parent company from 2022 to 2024 will be RMB 1.612 billion, 2.313 billion and 2.927 billion, an increase of 47.8%, 43.5% and 26.5% at the same time. The current share price corresponds to 19, 13 and 10 times of PE from 2022 to 2024 respectively. Considering that the company is a leading enterprise of positive pole, the production capacity growth is accelerated, the new integrated layout is deepened, and the “recommended” rating is maintained.
Risk tip: the sales volume of terminal new energy vehicles is lower than expected; The speed of production expansion is lower than expected; Competition for cathode materials has intensified.
