\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 50 Contemporary Amperex Technology Co.Limited(300750) )
I. loss of 22q1 due to short nickel?
The disclosure rules of hedging instruments publicized in the 21st Annual Report of the company are as follows: the profits or losses generated by hedging instruments that belong to the effective part of hedging are regarded as cash flow hedging reserves and included in other comprehensive income. The ineffective part of hedging (i.e. other gains or losses after deducting other comprehensive income) shall be included in the current profit and loss. For example, assuming that the company Q1 needs to use 1000 tons of nickel and 1000 tons of hedging on futures, all these 1000 tons belong to the effective part, and the profits and losses are entered into the balance sheet without affecting the profits; However, if 2000 tons are hedged and the remaining 1000 tons are hedged, the profit and loss will enter the investment income, thus affecting the income statement. The annual report shows that the effective part has a loss of 770 million yuan and the invalid part has a loss of 10 million yuan; The first quarterly report of 22 years shows that the effective part has a loss of 1.18 billion yuan, and the investment income of the invalid part has no breakdown data, but the total is positive. Therefore, there may be hedging losses in the first quarter of 2012, but it is possible to be hedged by the increase of other investment income. It can only be said that the total investment income is positive and has not been significantly dragged down.
II. How much is the company's inventory?
We analyze from two perspectives: 1. Cash flow and 2. Inventory.
1. Cash Flow Perspective
Ideally, if the raw materials purchased in the current period are used up in the current period and there is no inventory, the bills, etc. are not considered (Ningde may mainly use bills for settlement, but the bills and accounts payable can't see the period number of each quarter, only the time points, which can't be compared) The cash paid by labor service should be similar to the current operating cost (of course, the direct material cost is more accurate, but there is no detailed quarterly data, and the company's direct material accounted for 84% of the operating cost in 21 years).
Since 21q4, the operating cost of the company is greater than the cash paid, and the purchase quantity is greater than the use quantity, indicating that the company is using the raw materials in inventory. The operating cost of 21q3 is significantly less than the cash paid, and the usage is much less than the purchase, indicating that the raw material inventory has been accumulated intensively at this stage. The operating cost of 21q4 once again exceeds the cash paid, indicating that the company is using Q3 inventory raw materials, which can also explain why the company's Q4 gross profit margin and net profit margin can basically remain stable. 22q1 operating cost is basically equal to paying cash, which indicates that the proportion of raw materials in stock decreased and the proportion of market procurement increased, which can partly explain the sharp decline of the company's gross profit margin and net profit margin.
Looking at the total amount first, the chain comparison of inventory is + 15%, while the chain comparison of operating cost is + 103% (because the company's inventory is mainly commodities, so the comparison of operating cost is directly adopted). It shows that Q4 does consume more inventory, which is consistent with the above cash flow analysis. Although the inventory in this quarter may be the cost of the next quarter, the gap should not be large when rolling every month. There are not many low-cost inventories used in Q1, so the cost increases.
Looking at the inventory structure, we can divide it into two categories:
1. Raw materials (lithium carbonate, etc.): about 8 billion, year-on-year + 215%.
2. Goods (finished goods in process, goods in stock, goods issued, semi-finished products, etc.): a total of about 31 billion, a year-on-year increase of + 166%.
The increase of raw materials is more than that of commodities, that is, the increase of inventory such as lithium carbonate last year is more than that of battery inventory.
22q1 did not disclose the detailed structure, but the total inventory was a record high of 61.6 billion yuan. At the same time, the inventory of 21q1 was + 43% month on month and the operating cost was - 3% month on month in the same period, so the inventory of 22q1 increased significantly again.
Is the company's inventory increased by raw materials or batteries?
According to the above analysis, because Q4 consumes a lot of raw materials, and the price of Q1 raw materials has been at a high level, and the cost of storing raw materials is high, we infer that it is mainly due to the increase of battery inventory, which can also explain the - 15% mom of the company's 22q1 revenue. The company's explanation for this is that there are transportation and production scheduling problems overseas, and the epidemic situation in China affects the receipt of goods by downstream vehicle factories. In short, the company has produced batteries, but it is difficult to deliver them to customers in time or they have been delivered but have not reached the status of revenue recognition, resulting in a sharp increase in inventory and a decline in revenue month on month. We speculate that overseas customers have a greater impact, because the shipping schedule and journey are more difficult, and the batteries of overseas customers with greater impact can be priced at a favorable price through metal linkage, while most of the batteries of Chinese customers with less impact have no favorable price in Q1, so the overall gross profit margin pressure is greater. We believe that this is the main reason why Q1 performance is lower than expected.
III. provision for inventory impairment: it is expected to be reversed in the future
The 2021 annual report shows that the impairment of the company's assets is 2 billion, mainly for the provision for inventory falling price. We think it's prudent (the company's telephone conference also said). Specifically, the impairment of raw materials was not accrued in that year, but reversed, because the raw materials are obviously rising all the time, which is reasonable. The battery (commodity) has been withdrawn and reversed. Because the price of 21q4 has not been officially increased, the company may still deal with it according to the annual decline of battery price, because 800 million has also been withdrawn in the 20th annual report (the inventory value in that year is only 1 / 3 of that in 2021).
However, in the first quarterly report of 2021, the asset impairment is basically zero. We can't see the details of specific inventories. Is the 2 billion in Q4 reversed? Starting from 22q1, the price increase of batteries should be reversed. At least the part of the price increase should be reversed. If the price of some large customers' specific models of batteries cannot be increased, it may not be reversed. If not, it may be a potential for profit recovery in the future.
IV. Q1 loss caused by stock investment?
The impact of stock value fluctuation on the income statement is only reflected in investment income and profit and loss from changes in fair value. The company's annual report shows that the change in fair value is always 0. The items related to the change of stock price in the investment income include the investment income of trading financial assets during the holding period (corresponding to the change of stock price), the derecognition income of financial assets measured at amortized cost (corresponding to the sale of shares), and after some equity investments have no significant impact, For the profits remeasured at fair value (corresponding to the reduction of shares, if more than 20% is reduced to 5%, then the 5% is priced at fair value and related to the stock price), the investment income is profitable in 2021 and there is no loss in 2022q1. We speculate that it is mainly due to the sale of participating companies and the improvement of benefits, but at the same time, there is the possibility that the loss may be hedged by other investment income. In a word, on the whole, stock investment has not had a great negative impact on profits.
According to the company's 2021 annual report, the share prices of some listed companies in long-term equity investments and other equity instruments, such as Wuxi Lead Intelligent Equipment Co.Ltd(300450) , Chongqing Sokon Industry Group Stock Co.Ltd(601127) , Baic Bluepark New Energy Technology Co.Ltd(600733) and so on, fell significantly in 2021q1, but the companies in these two items will have an impact on the income statement only when they increase or decrease profits and dividends, and the fluctuation of share price will not have an impact on the income statement.
To sum up, it is unlikely that the stock investment will lead to a huge loss in Q1.
V. how to treat the follow-up operation of the company?
\u3000\u30001. yield
We estimate that the output of Q1 is 60gwh (sole proprietorship 52gwh + joint venture 8gwh), and the sales volume is 48gwh, including 41gwh of power battery and 7gwh of energy storage battery.
In terms of production scheduling, the production scheduling of the sole proprietorship is expected to be 18, 13 and 21 GWH respectively from January to March. Considering the impact of the epidemic, the production scheduling is expected to be 17 and 21 GWH respectively from April to May. The sales volume of the joint venture is g62wh + g70wh, and the output of the joint venture is expected to be g62wh.
Throughout the year, considering the impact of the epidemic, the output is expected to be Shanghai Huahongjitong Smart System Co.Ltd(300330) gwh and the sales volume is expected to be 280300gwh in 2022. The annual sales volume in 2023 is 400450gwh.
\u3000\u30002. cost
According to the above analysis, the company currently has 60 billion Inventory (presumably mainly power batteries). Combined with the 47 billion operating cost of Q1 and considering the impact of the epidemic on shipments, we speculate that this part of inventory is enough to cover the shipments of Q2.
Assuming that the cost of Q1 corresponds to the inventory of Q4 and the cost of Q4 corresponds to the inventory of Q3, the company's lithium carbonate purchase cost Q4 does not increase by more than 100000 month on month. We estimate that the average battery cost of Q1 company is about 0.65-0.7 yuan / wh, and the lithium carbonate used per wh is about 650 grams, that is, the cost rise is less than 10%.
\u3000\u30003. Price
In terms of favorable price mechanism, the price linkage of overseas metals is basically based on metal prices (except Tesla, but it has been negotiated that the price will rise by more than 10% from June). Chinese battery companies have generally completed two rounds of price increases, each of which is more than 10%, most of which are implemented in March and June respectively, and a small part of Q1 has been implemented, so the unit price increase of Q2 should be more than 10% month on month. If we superimpose overseas full favorable price, energy storage system and ternary high nickel, the proportion may increase, and the month on month increase of unit price will be much higher than 10%.
Based on the comprehensive cost and price, we believe that the gross profit margin of Q2 will improve month on month. Superimposed on the increase in the new supply of lithium carbonate in the second half of the year, the lithium price may fall in the short term, and the company's profit is expected to gradually return to the level of 0.1 yuan / wh.
The company is the leader of lithium battery. We are optimistic about the company's industrial chain layout + global share growth + leading product technology for a long time. We expect the company to ship 280 and 450 GWH in 202223, corresponding to a net profit of 26.1 and 42.4 billion yuan, 38 and 24 times PE in 2022 and 2023, which is recommended for a long time.
