\u3000\u30 Jinzai Food Group Co.Ltd(003000) 35 Hunan Zhongke Electric Co.Ltd(300035) )
Artificial graphite is still the mainstream. Compared with artificial graphite, silicon-based negative electrode has high specific capacity and can improve the energy density of battery, which is the trend of development in the future. Difficulties to be overcome for silicon-based negative electrode materials: drastic volume change and unstable SEI film. At present, the difficulties have not been overcome, coupled with high cost, the industrialization process will slow down. According to GGII data, in 2020, China’s shipments of artificial graphite reached 310000 tons, accounting for more than 80%.
The integration of layout graphitization has obvious cost reduction benefits, and excessive penetration of coke raw materials may do more harm than good. In the case of product consistency, cost is the core competitiveness of manufacturing industry. According to Hunan Zhongke Electric Co.Ltd(300035) fixed increase reply letter, from January to September 2021, the price per ton of negative electrode materials of the company was 30300 yuan. According to the prospectus of Shangtai technology, the cost per ton of graphitization outsourcing in the first half of the year was 10800 yuan. It was calculated that the cost of graphitization process accounted for 36% of the sales unit price. Therefore, to reduce costs, graphitization must be arranged. Taking Shangtai technology as an example, the cost of graphitization outsourcing is 5500 yuan higher than that of graphitization self production. If the self supply proportion of graphitization reaches 100%, the gross profit margin can be increased by 20PCT and the cost reduction benefit is obvious. In addition to graphitization, there are also raw materials that account for a high proportion of the cost of cathode materials. We believe that the supply of raw materials can be properly guaranteed. Excessive penetration of this link may do more harm than good. The reasons are as follows: 1) according to the production process of coke raw materials, it is found that coke raw materials are by-products of coal chemical enterprises, and the production capacity of coal chemical enterprises is put in a large number, so it is not difficult to purchase coke raw materials; 2) The price difference between self production and outsourcing of graphitization is RMB 5-6000 / ton. Under normal circumstances, the purchase unit price of coke raw materials is RMB 3-5000 / ton. Calculated according to 65% gross profit margin (the official website of Guangdong coal based carbon materials research Co., Ltd. shows that the gross profit margin of needle coke is 48.7%), it can save RMB 2-3000 / ton, and the value is about half of that of graphitization. If the production line of coke raw materials is established separately, there will be no economic benefits; 3) The excessive distribution of coke raw materials is cyclical due to its strong correlation between the price trend and oil. Under the condition of Pro cycle, it will benefit from the price rise of raw materials, and under the condition of counter cycle, it will also drag down the release of the company’s profits.
Hunan Zhongke Electric Co.Ltd(300035) : benefit from the release of production capacity, increase the proportion of graphitization self supply, and release the profit elasticity.
Our customers are of high quality. In China, customers include Contemporary Amperex Technology Co.Limited(300750) , Byd Company Limited(002594) , China Innovation airlines, etc; Abroad, customers include ski. In addition, LG, Panasonic and Samsung are also actively developing. The company, together with Ningde and Yiwei, respectively put into production 100000 tons of capacity. According to the capacity statistics, we expect the capacity to reach 72000 tons and 162000 tons in 20222023, and the self supply proportion of graphitization in 23 years will reach 67% (the self supply proportion of graphitization in 21 years will be less than 45%).
Investment suggestion: we estimate that the operating revenue of the company from 2021 to 2023 will be RMB 1.96 billion / 4.58 billion / 6.78 billion respectively, with a year-on-year growth rate of 38% / 134% / 48%. The net profit attributable to the parent company was 360 / 720 / 1.13 billion yuan respectively, with a year-on-year increase of 130% / 97% / 57%. EPS is 0.5/0.99/1.56 yuan, and the current share price corresponds to PE 42 / 21 / 13. It will be valued at 35 times in 2022, with a corresponding market value of 25.2 billion and a corresponding share price of 35 yuan. It will be covered for the first time and given a “recommended” rating.
Risk tip: the industry’s production capacity has been greatly released, resulting in a decline in prices; Downstream demand is lower than expected; The graphitization capacity of the company was put into operation less than expected.
