The readings of this report are as follows:
The graphitization process of the company's equipment method can greatly reduce the manufacturing cost, and if successful industrialization is expected to change the fierce competition in the negative track and achieve excess income.
Main points of investment:
Conclusion: when the current time point company cuts into the negative track, if the continuous graphitization new technology industrialization is realized, it is expected to change the fierce competition in the industry and realize the excess income. Anode materials are expected to contribute revenue from 2022, and the EPS in 2021-23 is expected to be 0.82,0.96,1.16 yuan respectively. Based on the valuation of comparable companies, the target price is 13.89 yuan, covering and increasing holdings for the first time.
Cut into the negative track, continuous graphitization of the new process is expected to change the fierce competition in the industry. Benefiting from the high increase in production and sales of new energy vehicles, the production capacity of negative material manufacturers is full, but the graphitization capacity of the core process is limited, and it is expected that the cost of graphitization contract manufacturing will be difficult to reduce before the end of 2022, forcing the price of negative materials to rise further. Therefore, we think that at this stage, the company is entering the negative track at the right time. From the process point of view, the existing graphitization into intermittent process, the company uses the equipment method to achieve continuous graphitization process, which can reduce power consumption by 60-70%, reduce the overall cost by 30%, and greatly reduce the area of equipment, if the company successfully realizes industrialization, it is possible to change the existing competition pattern and achieve excess benefits.
21H1 construction machinery business continues to grow high, and infrastructure policy is expected to be implemented in the fourth quarter. 21H1's construction machinery business grew by 56.6%. Due to the high base in the second half of the year, revenue growth may be under pressure, but we believe that infrastructure policy may be implemented in the fourth quarter, and the monthly data decline may be narrowed. In addition, 23% of the company's excavator sales were exported overseas in 2020, and the European market grew by 150% in the first half of 2021. We believe that compared with the same industry, overseas markets will drive the company's overall growth. The gross profit margin fell 2.6pct in the first half of the year due to the influence of raw material prices, but considering the recent joint price increases by construction machinery manufacturers, we expect the pressure on gross profit margin to ease in the second half of the year, and the overall construction machinery business is expected to improve.
Catalyst: the negative material has been verified by the downstream major customers, and the monthly sales decline of construction machinery has narrowed the risk. It suggests that the competition in the construction machinery market continues to intensify, and the landing progress of the industrialization of the new technology is not as expected.
