\u3000\u3000 Shandong Fengyuan Chemical Co.Ltd(002805) (002805)
Event: the company issued several announcements, such as strategic cooperation agreement, 2022 non-public development bank stock plan and so on.
Expand the production of 200000 tons of lithium cathode materials, supporting the production capacity of lithium salt and iron phosphate, and realize the self supply of raw materials. The company issued an announcement and signed a strategic cooperation agreement with Yuxi Municipal Government of Yunnan Province, which plans to invest in the construction of 200000 tons of lithium battery cathode materials in Yuxi. The project is divided into three phases. In the first phase, RMB 1 billion will be invested to build a pilot test line with an annual output of 50000 tons of lithium iron phosphate cathode and 1000 tons of clay lithium extraction. After the pilot test line is verified, 50000 tons / year lithium salt capacity and 200000 tons / year iron phosphate capacity will be built. The company strategically distributes lithium and iron phosphate precursors from clay, realizes the integrated extension of the industrial chain, ensures the independent supply of upstream raw materials and controllable material costs, and is expected to further consolidate the company’s long-term competitive advantage.
There are two high-quality customers Byd Company Limited(002594) and Guangzhou Great Power Energy&Technology Co.Ltd(300438) in the field of deep cooperation power and energy storage, and the demand of downstream customers is increasing. Since the company passed the Byd Company Limited(002594) supplier certification in mid-2021, it has carried out close and in-depth cooperation with Byd Company Limited(002594) . In 2021, Byd Company Limited(002594) new energy vehicles sold a total of 603800 vehicles, a year-on-year increase of 218%; The total installed capacity of power battery is 25.06gwh, accounting for 16.2% in China. In 2022, Byd Company Limited(002594) a large number of new cars will be listed one after another, further stimulating the market consumption potential. The continuous release of the company’s new production capacity is highly matched with the needs of downstream customers, and the cooperation between the two sides is expected to continue to deepen. Guangzhou Great Power Energy&Technology Co.Ltd(300438) is a leading enterprise in the field of energy storage. Previously, it was announced that it had signed a cooperation agreement with Fengyuan. Both parties clearly agreed that Guangzhou Great Power Energy&Technology Co.Ltd(300438) will purchase lithium iron phosphate and lithium nickel cobalt manganate (nickel 5 series and high nickel 8 series) products from Fengyuan from December 2021 to December 2022, with a total contract amount of about 800 million yuan, which is of great significance to the growth and certainty of the company’s revenue in 2022.
A fixed increase of 940 million yuan was raised to accelerate production capacity construction, and the actual controller participated in the subscription to demonstrate long-term confidence. The company plans to raise no more than 940 million yuan, which is mainly used for the construction of Anqing 50000 ton lithium iron phosphate cathode project and supplement of working capital after deducting the issuance expenses. Zhao Guanghui, the controlling shareholder and actual controller of the company, promised a subscription amount of 30-90 million yuan, demonstrating the actual controller’s sufficient confidence in the long-term development of the company.
The company actively promotes capacity construction. By the end of 2022, the capacity of iron lithium is expected to reach 75000 tons, exceeding previous expectations. Combined with the needs of downstream customers, the company has accelerated the construction progress of production capacity. At present, a total capacity of 350000 tons of cathode materials is planned. By the end of 2022, the production capacity of iron lithium is expected to reach 75000 tons and the production capacity of ternary is expected to reach 15000 tons. The construction progress is higher than previously expected.
Profit forecast and Valuation: according to the profit forecast of Shangxiu company, the net profit attributable to the parent company is expected to be RMB 52 / 224 / 598 million from 2021 to 2023, with a year-on-year increase of 277.9% / 330.5% / 167.5%, and the corresponding PE of the current stock price is 107.6/25.0/9.3 times respectively. Maintain the “buy” rating.
Risk tip: the production capacity construction progress is less than expected; Downstream demand is lower than expected; The risk of intensified industry competition; Risk of tight supply of upstream raw materials;
