\u3000\u3000 Ningbo Ronbay New Energy Technology Co.Ltd(688005) (688005)
Events
Ningbo Ronbay New Energy Technology Co.Ltd(688005) recently announced: it is expected to realize the net profit attributable to the parent company of 890 million yuan – 920 million yuan in 2021, yoy + 318% – 332%
Key investment points
The performance is eye-catching, and the profit per ton continues to improve
The company expects to realize the net profit attributable to the parent company of 341 million yuan to 371 million yuan in 2021q4, with a year-on-year increase of 241% – 271% and a month on month increase of 50% – 63% compared with 2021q3; It is estimated that the non deduction performance of 2021q4 will be RMB 331 million-361 million, with a chain increase of 62% – 76% over 2021q3, and the performance is eye-catching. We expect that the company’s 2021q4 cathode material sales volume is about 19000 tons, corresponding to 2021q4 single ton deduction non-profit of about 18000-19000 yuan / ton, an increase of about 4000-5000 yuan / ton compared with 2021q3. The substantial improvement in profits is due to: on the one hand, the company actively layout integration and strengthen cost competitiveness; On the other hand, the inventory of raw materials has a positive impact. We expect the company to ship about 55000 tons in 2021, double the growth, and deduct non single ton profit of about 15000 yuan / ton in the whole year.
Looking forward to the future, we judge that the profit per ton of the company’s products is expected to remain high. On the one hand, the company actively locked in lithium carbonate raw materials, improved the self supply rate of precursors, increased cooperation with advantageous suppliers such as Huayou, and further strengthened the cost advantage; On the other hand, the company has strong self-research ability of equipment, actively layout around the “new integration”, and the investment intensity of new production capacity is lower than the industry average, effectively improving efficiency and reducing depreciation cost; In addition, the advantages of scale are prominent, and it is expected to dilute the cost of a single ton; Moreover, the company’s product structure will be further optimized, and the proportion of its high nickel products is expected to continue to increase, so as to improve its profitability.
Speed up capacity expansion and strategically explore global leading customers
By the end of 2021, the positive electrode capacity of the company will reach 120000 tons, the positive electrode capacity of the company will exceed 200000 tons and the precursor capacity will reach 90000 tons. In the long run, the company plans to produce about 700000 tons of cathode. Continue to develop global high-quality customers. In January 2022, the company signed a strategic cooperation agreement with Contemporary Amperex Technology Co.Limited(300750) . It is expected that Contemporary Amperex Technology Co.Limited(300750) will purchase about 100000 tons of high nickel ternary from the company in 2022. From 2023 to 2025, Contemporary Amperex Technology Co.Limited(300750) will take the company as its largest supplier of ternary materials and actively carry out technical cooperation on new products. In July 2021, the company signed a purchase agreement with Farasis Energy (Gan Zhou) Co.Ltd(688567) and is expected to purchase 31000 tons of ternary materials from the company in Farasis Energy (Gan Zhou) Co.Ltd(688567) 2022.
Focusing on the new integration, the company strengthens the design ability of production line through endogenous and extension, binds high-quality raw material suppliers and strengthens cost competitiveness. In November 2021, the company signed a strategic cooperation agreement with Zhejiang Huayou Cobalt Co.Ltd(603799) . From 2022 to 2025, the company plans to purchase no less than 180000 tons of precursors from Huayou. Under the condition of competitive product prices, the two sides expect the purchase volume of precursors to reach 415000 tons. In December 2021, the company plans to acquire 70% equity of Fenggu energy conservation with 41.7 million yuan to strengthen the layout of core equipment in the production line.
Overall, the company’s forward-looking production capacity layout, accelerated the pace of global expansion, gradually improved the industrial chain, and further strengthened the company’s cost competitiveness. The company’s position is prominent, with global high-quality customers, and the market share is expected to expand gradually.
Deep cultivation of high nickel gold track, with excellent growth
The company deeply cultivates the high nickel ternary track, which is in line with the development trend of the future technology path and has large long-term growth space. According to xinlune lithium battery, in 2021, the output of ternary materials in China was about 400000 tons, yoy + 89.5%, and Cr5 was 53%. In 2021, the global output of ternary materials was about 730000 tons, yoy + 79%, and China accounted for about 55%. In 2021, the company’s market share in China was 14%, ranking first, and the global market share was about 8%, ranking second, second only to 9% of LGC. The permeability of high nickel continued to increase. In November 2021, the proportion of ncm811 in China’s ternary output increased to about 40%, compared with about 30% in January 2021.
We believe that the company takes root in the high nickel cathode track, strengthens the self-development ability of equipment inside and outside and improves efficiency; Actively expand production capacity, deepen integrated layout and strengthen cost competitiveness; Gather excellent partners in the whole industry chain and contribute to carbon neutralization. On the whole, the track where the company is located has good growth attributes, the business layout of the company is clear, and the cost and performance are expected to continue to dominate the industry, improve the market share, and continue to grow at a high speed.
The profit forecast predicts that the net profit attributable to the parent company in 2021, 2022 and 2023 will be RMB 9 / 2 / 3 billion, EPS will be RMB 2.01/4.52/6.83, and the corresponding PE will be 64 / 29 / 19 times respectively. Based on the company’s high-quality track, excellent customers, global capacity expansion and industrial layout in line with the future development trend, we are optimistic about the company’s medium and long-term upward development opportunities and give a “recommended” rating.
Risk tips
Policy fluctuation risk; Downstream demand is lower than expected; The product price is lower than expected; Risk of deterioration of competition pattern; Capacity expansion and digestion were not as expected
