\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 77 Beijing Hezong Science&Technology Co.Ltd(300477) )
Company events
The company disclosed the annual report of 2021 and the quarterly report of 2022q1: in 2021, the company realized an operating revenue of 2.43 billion yuan (+ 87.03%); The net profit attributable to the parent company was 106 million yuan, with a base of – 776 million yuan last year, turning losses into profits. In 2022q1, the company realized an operating revenue of 698 million yuan (+ 42.64%); The net profit attributable to the parent company was 91.23 million yuan (+ 318.90%); The net profit attributable to the parent company after non deduction was 91.15 million yuan (+ 334.95%).
The two main businesses made concerted efforts to boost the company’s performance
1) lithium battery materials: in terms of production and sales, during the reporting period, the company accelerated the production progress of Hunan Yacheng iron phosphate project, with the output of iron phosphate reaching 33900 tons. During the year, the total production of lithium battery materials was 36000 tons, with a year-on-year increase of + 108.93%, and the sales of 37000 tons, with a year-on-year increase of + 128.62%; In terms of price, benefiting from the high prosperity of the industry, the demand for iron phosphate, cobalt trioxide and other products increased significantly, and the price continued to rise. According to the data of Baichuan, the average market price of iron phosphate in 2021 was 16400 yuan / ton, a year-on-year increase of + 34.74%, the average market price of cobalt trioxide was 308600 yuan / ton, a year-on-year increase of + 55.45%, and the average market price of cobalt hydroxide was 268000 yuan / ton, a year-on-year increase of + 72.67%.
2) power equipment sector: in terms of production and sales, the epidemic situation improved in 2021, and the company’s orders increased. The company’s production of transmission and distribution equipment manufacturing business reached 31400 units, a year-on-year increase of + 8.4%, and the sales of 31100 units, a year-on-year increase of + 33.7%; In terms of gross profit margin, the gross profit margin of the company’s power sector increased to 23.08%, with a year-on-year increase of + 9.56%. While continuing to develop the manufacturing business of distribution equipment, the company is also actively expanding new fields such as power informatization and new energy, promoting the construction layout of photovoltaic power generation, energy storage and other projects, optimizing the product structure and improving the performance of the power sector.
The company continued to layout the lithium battery market, and the capacity release of iron phosphate project was accelerated
The volume and price of iron phosphate industry have risen simultaneously, and the company has steadily promoted the investment and construction of iron phosphate project: ① Hunan Yacheng battery grade iron phosphate project with an annual output of 60000 tons. The second phase of the project was officially put into operation in April 2021 and is now in full operation; ② The 50000 ton battery grade iron phosphate expansion project of Hunan Yacheng Ningxiang base is currently under construction and is expected to be put into operation at the end of the third quarter of 22; ③ The annual output of 300000 tons of battery grade iron phosphate project in Guizhou is constructed by stages, and the phase I production capacity of 100000 tons is expected to be put into trial production by the end of 2022; ④ Yibin base’s 100000 t / a battery grade iron phosphate intelligent factory project is invested and constructed by the company in cooperation with Huayou holdings. The project is divided into two phases, with a production capacity of 50000 T / A. By the end of 2022, the company’s iron phosphate production capacity is expected to reach 210000 tons / year, which is expected to become an important global supplier of battery materials.
Investment advice
We expect the company to achieve revenue of RMB 4.79/6.01/7.82 billion from 2022 to 2024, with a year-on-year increase of 97.0% / 25.4% / 30.3%; The net profit attributable to the parent company was RMB 350 / 5.5 / 890 million, with a year-on-year increase of 230.1% / 57.2% / 60.7%. The current stock price corresponds to PE 18x / 11x / 7X, maintaining the “buy” rating.
Risk tips
The progress of new projects is less than expected, the price of raw materials fluctuates, the price of products falls sharply, and the market demand is less than expected.
