The company released the first quarterly report of 2022. In Q1 of 2022, the revenue was 48.678 billion yuan, 153.97% year-on-year and – 14.59% month on month; The net profit attributable to the parent company was 1.493 billion yuan, with a year-on-year ratio of – 23.62%, a month on month ratio of – 81.75%, a net interest rate of 3.07%, a year-on-year ratio of -7.13 PCTs and a month on month ratio of -11.29 PCTs; The net profit deducted from non parent company was 977 million yuan, with a year-on-year increase of – 41.57% and a month on month increase of – 85.71%. The performance was lower than the market expectation. In the short term, affected by the sharp rise in the price of upstream raw materials and a certain lag in the price rise of downstream customers, the company’s profitability is under pressure in stages. However, with the gradual implementation of the price rise of downstream customers and the accelerated layout at the upstream resource end, we expect the company’s profitability to be gradually restored in the follow-up. As a global energy storage company, it is expected to fully enjoy the opportunities brought by the global energy storage market and lead the global energy storage market. The company’s power battery business is in a high-speed growth period, and the energy storage business will gradually enter the growth period from the introduction period, with high growth certainty and medium and long-term investment value.
The company released the first quarterly report of 2022 on April 29, 2022. In this regard, our comments are as follows:
▍ Q1 realized a net profit attributable to the parent company of 1.493 billion yuan, with a year-on-year increase of – 23.62% and a month on month increase of – 81.75%, lower than the market expectation
The company achieved a revenue of 48.678 billion yuan in Q1 in 2022, with a year-on-year growth of 153.97% and a month on month growth of – 14.59%; The net profit attributable to the parent company was 1.493 billion yuan, with a year-on-year ratio of – 23.62%, a month on month ratio of – 81.75%, a net interest rate of 3.07%, a year-on-year ratio of -7.13 PCTs and a month on month ratio of -11.29 PCTs; The net profit deducted from non parent company was 977 million yuan, with a year-on-year increase of – 41.57% and a month on month increase of – 85.71%. The performance was lower than the market expectation. The total non recurring gains and losses is about 516 million yuan, including about 457 million yuan of government subsidies and about 310 million yuan of gains and losses from the disposal of non current assets. Q1 company achieved an investment income of 461 million yuan, with a significant increase year-on-year (only 06 million yuan in the same period last year). On the one hand, it is because of the sale of part of the equity of the joint-stock company, on the other hand, the improvement of the efficiency of the joint-stock company has increased the investment income. The net operating cash flow of Q1 company was 7.076 billion yuan, with a year-on-year increase of – 35.48% and a month on month increase of – 50.25%. It is expected that it is mainly due to the tight supply of upstream raw materials and the rapid rise of prices. The company purchases a large number of raw materials to enhance the guarantee of the supply chain. By the end of the first quarter of 2022, the company’s inventory scale was 61.578 billion yuan, up + 53.18% from the end of 2021.
▍ gross profit margin is under pressure from the rise of raw material prices, and the cost rate remains stable during the period
The gross profit margin of 2022q1 company was 14.48%, with a year-on-year decrease of -12.79pcts and a month-on-month decrease of -10.22pcts, which was mainly due to the fact that the company undertook the main pressure of raw material price rise in 2022 Q1 and had a certain lag in the transmission of price rise to downstream customers; In 2022, the expense ratio of Q1 company during the period was 10.98%, with a year-on-year ratio of -1.49pcts and a month on month ratio of + 0.75pct, of which the sales expense ratio was 3.15%, with a year-on-year ratio of -0.46pct and a month on month ratio of + 0.10pct; The management expense ratio was 2.56%, with a year-on-year ratio of -1.18pcts and a month on month ratio of + 0.56pct; The R & D expense ratio was 5.28%, with a year-on-year ratio of -0.89pct and a month on month ratio of -0.16pct; The financial expense ratio was 0.00%, with a year-on-year increase of + 1.04pcts and a month on month increase of + 0.25pct.
▍ China’s share remained stable, overseas market expansion accelerated, and the leading position of power batteries continued to be consolidated
Under the demand of downstream car enterprises to continuously improve the quality of electric vehicle products, the company, as the absolute leader of first-line power batteries, continues to maintain a high market share. In the Chinese market, according to the data of China Automotive Power Battery Industry Innovation Alliance (cabia), the installed capacity of Contemporary Amperex Technology Co.Limited(300750) China Shipbuilding Industry Group Power Co.Ltd(600482) batteries in 2021 was 80.51gwh, a year-on-year increase of + 153%, and the market share was 52.1%, which was still 2.10pcts higher than that in 2020 and remained the first in China.
In terms of overseas markets, according to SNE research statistics, the global installed capacity of power batteries reached 296.8gwh in 2021, with a year-on-year increase of + 102.18%, of which Contemporary Amperex Technology Co.Limited(300750) global installed capacity was 96.7gwh, with a year-on-year increase of + 167.13%, higher than the overall growth rate of the industry; In 2021, the market share of Contemporary Amperex Technology Co.Limited(300750) global power battery was 32.6%, with a year-on-year increase of + 8pcts. It remained the first in the world for five consecutive years, and its leading position was stable.
According to the latest data of cabia, from January to March 2022, Contemporary Amperex Technology Co.Limited(300750) China Shipbuilding Industry Group Power Co.Ltd(600482) battery installed capacity was 25.51gwh, with a market share of 49.8%, and the market share of China remained basically stable; According to the latest data of SNE, from January to February 2021, Contemporary Amperex Technology Co.Limited(300750) global installed capacity of power battery was 18.4gwh, and the global market share further increased to 34.4%.
▍ new technologies: CTP, CTC and other technologies improve the energy density of batteries, and sodium ion batteries and power exchange schemes are expected to accelerate the introduction
The company continues to develop and lead the industry in the field of battery technology. At present, CTP technology has developed to version 3.0, with power increased by 13% and weight reduced by 10%, so that the energy density of LFP system exceeds 160wh / kg and that of NCM system exceeds 250wh / kg; CTC technology under development can make the mileage of new energy vehicles exceed 1000km, improve energy efficiency by 3% and bulk energy density by 15%; The design of a + B battery can be either “Li + Na” or “NCM + LFP”, which can meet the needs of multi scenario applications and increase the energy density by 10% ~ 30%. Since 2021, the company has successively released the first generation of sodium ion batteries (the energy density of single cell reaches 160wh / kg) and the power exchange brand evogo. Through the design of “chocolate power exchange block” and CTP technology, the weight energy density exceeds 160wh / kg, the volume energy density exceeds 325wh / L, and the service life of single battery is about 200km. It is expected that these new technologies are expected to accelerate the implementation in 2022. At the same time, the company has a forward-looking layout in terms of new technology routes such as solid-state batteries, lithium metal batteries, cobalt free batteries and lithium air batteries.
▍ risk factors:
The company’s fixed increase and raised investment projects are not progressing as expected; The sales volume of downstream new energy vehicles did not meet expectations; Price fluctuation of raw materials; Technical route change, etc.
▍ investment suggestions:
Considering the rising price of raw materials and the phased pressure on the profitability of the company, the forecast of net profit attributable to the parent company in 2022 was adjusted to 23.7 billion yuan (the original forecast was 28 billion yuan), and the forecast of net profit attributable to the parent company in 2023 / 24 was 39.8/54.4 billion yuan respectively, corresponding to the EPS forecast of 10.15/17.09/23.36 yuan in 2022 / 23 / 24. In the short term, affected by the sharp rise in the price of upstream raw materials and a certain lag in the price rise of downstream customers, the company’s profitability is under pressure in stages. However, with the gradual implementation of the price rise of downstream customers and the accelerated layout at the upstream resource end, we expect the company’s profitability to be gradually restored in the follow-up. Considering that the global trend of vehicle electrification is relatively certain, the high-end power battery is in continuous shortage, and the global energy storage market is approaching the outbreak, the market space brought by energy reform is huge. As the leader of energy reform, the company is expected to fully enjoy the development opportunities of the industry. The company’s power battery business is in a high-speed growth period, and the energy storage business will gradually enter the growth period from the introduction period, with high growth certainty and medium and long-term investment value.
