\u3000\u3000 Hunan Zhongke Electric Co.Ltd(300035) (300035)
The company released the performance forecast for 2021, and the annual performance is expected to increase by 110% – 140%. The negative electrode capacity of the company continued to expand, the proportion of graphitized self supply gradually increased, and the buy rating was maintained.
Key points supporting rating
It is predicted that the profit in 2021 will increase by 110% – 140% year-on-year: the company issued the performance forecast for 2021, and it is expected to realize the net profit attributable to the parent company of RMB 344-393 million in 2021, with a year-on-year increase of 110% – 140%; Deduct non net profit of RMB 321-366 million, with a year-on-year increase of 110% – 140%. According to the performance forecast, the company expects to realize a net profit attributable to the parent company of 93-142 million yuan in 2021q4, with a year-on-year increase of 81.8% – 177.5% and a month on month increase of 2.3% – 56.2%; Deduct non-profit of RMB 75-121 million, with a year-on-year increase of 55.4% – 150.2% and a month on month change of – 15.6% – 35.9%. The company’s forecast performance is in line with expectations.
The production and sales of cathode materials are booming, and the production capacity continues to expand: affected by the growth of global new energy vehicle industry and downstream customer demand, the output and sales of cathode materials of the company increased significantly year-on-year in 2021. We expect the annual sales volume to reach 55000-60000 tons. The company continued to increase the production capacity of negative electrode materials, and successively arranged 100000 tons of integrated production capacity in Gui’an new area of Guizhou, 100000 tons of integrated production capacity in Qujing of Yunnan, 45000 tons of graphitization capacity of Guizhou Zhongke, etc. By the end of 2022, the company’s negative electrode material production capacity is expected to reach 250000 tons, and the self supply proportion of graphitization is expected to increase to 80%. According to the production capacity plan announced by the company, the production capacity of negative electrode materials of the company is expected to reach 340000-350000 tons in the future.
The application for fixed increase has been approved: the company previously announced that it plans to raise no more than 2.206 billion yuan for the 50000 ton lithium battery cathode material production base project, 30000 ton lithium battery cathode material and 45000 ton graphitization processing and construction project of Hunan Zhongke Xingcheng graphite Co., Ltd., and supplement working capital. At present, the application for fixed increase has been approved by the CSRC.
Valuation
Under the current share capital, combined with the company’s performance forecast and industry conditions, we adjusted the company’s predicted earnings per share from 2021 to 2023 to 0.55/1.05/1.51 yuan (the original predicted earnings per share was 0.54/0.92/1.25 yuan), corresponding to 55.1/28.8/20.1 times of P / E; Maintain buy rating.
Main risks of rating
The new energy vehicle industry policy did not meet expectations; The product strength of new energy vehicles does not meet expectations; The demand of the industrial chain does not meet the expectation; The price competition in the industrial chain exceeded expectations; The impact of the epidemic exceeded expectations.
