\u3000\u3 Shengda Resources Co.Ltd(000603) 612 Sunstone Development Co.Ltd(603612) )
Company events
Recently, the company announced that it plans to purchase 949777% equity of Xinyuan shares by issuing shares and paying cash. After negotiation, the transaction price corresponding to 100% equity of Xinyuan shares shall not be higher than 1.2 billion yuan, of which the cash payment amount of the company shall not exceed 30% of the transaction consideration. After the completion of this transaction, Xinyuan shares will become the holding subsidiary of the listed company.
Xinyuan Co., Ltd. produces lithium cathode with outstanding technical advantages
Xinyuan Co., Ltd. is mainly engaged in lithium-ion battery cathode material products and thin film capacitors. Its wholly-owned subsidiary, Inner Mongolia Xinyuan, has the advantage of integrated production of artificial graphite. Its main customers of cathode products are Ningbo Shanshan Co.Ltd(600884) and beiteri and other cathode material enterprises. In 2021, Xinyuan Co., Ltd. achieved a revenue of 515 million yuan, a year-on-year increase of + 35.5%, and a net profit attributable to the parent company of 84 million yuan, a year-on-year increase of + 114.6%, deducting a net profit not attributable to the parent company of 80 million yuan, a year-on-year increase of + 122.4%. Among them, the revenue of graphite cathode business was 259 million, accounting for 50.3%; The gross profit was 110 million yuan and the gross profit margin was 40.4%. The overall profitability of graphite anode was higher than the average level of Chinese listed anode companies.
Further promote the strategic layout of “green electricity + new carbon materials”
In April 2022, the company announced that it plans to invest 720 million yuan to build the 50000 ton project in the first phase of the 200000 ton lithium battery cathode material project in Gansu. The acquisition of Xinyuan shares with outstanding process advantages will help to make up for the company’s technical shortcomings in the field of lithium battery cathode, effectively promote the company’s layout in the field of lithium battery cathode, and help the formation of the company’s dual main business of “pre baked anode and lithium battery cathode”.
Investment advice
The company is the leader of prebaked anode in China, and the layout of lithium battery materials is expected to open up new growth space. Regardless of this acquisition, we expect the company’s revenue from 2022 to 2024 to be RMB 136.8/173.2/20.41 billion respectively, with a year-on-year increase of 44.6% / 26.7% / 17.8%; The net profit attributable to the parent company was RMB 770 / 11.4 / 1.44 billion respectively, with a year-on-year increase of 24.2% / 47.8% / 26.1%; PE corresponding to the current share price is 11x, 8x and 6x respectively, maintaining the “buy” rating.
Risk tips
The project is put into operation less than expected, product price fluctuation risk, raw material price fluctuation risk, etc.
