Event: the company released its semi-annual report for 2021: the operating income in the first half of the year was 1.07 billion yuan, an increase of 45.1% over the same period last year, and the net profit was 160 million yuan, up 10.5% from the same period last year.
Comments:
Both new and old businesses are coming together, and the performance of 21H1 has risen steadily. Benefit from: (1) capacity release of lithium cathode materials; (2) revenue growth of intelligent electronic control plate compared with the same period last year; and (3) steady growth of traditional parts plate. The company's 21H1 realized operating income of 1.07 billion yuan, an increase of 45.1% over the same period last year, and a net profit of 160 million yuan, an increase of 10.5% over the same period last year. The growth rate of net profit was lower than that of income, mainly due to: (1) the price of raw materials and freight increased; (2) the lithium cathode materials were still in a climbing period, and the gross profit margin was lower than the traditional business, resulting in 21H1's gross profit margin of 30.2%, down 6.4 PCT from the same period last year.
Auto zero's main business is growing steadily and there are plenty of orders on hand. 21H1's auto parts business is steadily rising, mainly reflected in (1) precision hydraulic parts: revenue of 330 million yuan, year-on-year increase of 11.8%, gross profit margin of 32.4%, year-on-year decline of 0.5 PCT; (2) electromagnetic drive parts: revenue of 500 million yuan, year-on-year increase of 21.2%, gross profit margin of 39.0%, down 0.6 PCT. 21H1 has obtained a number of new project fixed points, including (1) traditional automobile plate: GAC MOTOR hybrid electric VVT fixed point, Great Wall Motor transmission solenoid valve 9AT fixed point, Volkswagen EA888 rocker arm, nozzle solenoid valve, oil pump tappet fixed point, PSA nozzle fixed point, CDC solenoid valve to obtain BYD and terminal SAIC and Guangzhou Auto project landing. (2) New energy vehicle plate: 400W, 450W, 200W, electronic water pump series have been mass produced in Geely and the Great Wall, and new Volkswagen electronic water pump actuator fixed point; electronic oil pump for Huawei series powertrain, and access to XPeng Inc., Bosch Reseller project fixed point; vehicle electric drive reducer has been Huawei, Chinese American Express project fixed point, joint electronics project has entered mass production, Huawei project production line has been under commissioning.
Customer development + capacity increase, lithium cathode material business accelerated release. Since 2021, the demand for lithium iron phosphate battery is strong. In 21H1, the sales revenue of lithium cathode material business reached 130 million yuan, an increase of 946.8% over the same period last year. At present, the company's new generation of high-pressure solid density lithium iron phosphate cathode material has been approved by some important customers in China. Jiangxi factory lithium iron phosphate continues to supply the Ningde era; flood shooting base 50,000 tons of lithium iron phosphate cathode material project is under equipment installation and commissioning, is about to enter the trial production stage and will be supplied in bulk this year. The company has invested in the construction project with an annual output of 250000 tons of lithium iron phosphate cathode material in July 2021, and plans to start construction in September 2021 and put the project into production before October 2022. The subsequent release of new capacity is expected to contribute to the high growth of the company's lithium cathode materials business.
Investment suggestion: the company has made joint efforts in both new and old business, the traditional steam zero business has grown steadily, the lithium cathode material business has accelerated, and the intelligent electronic control industry has been gradually put into production, driving the inflection point of medium-and long-term performance upward. We maintain the company's 21-22 year return net profit forecast of 4.3 yuan and 580 million yuan, corresponding to PE of 68 and 51 times respectively. Maintain a "buy" rating.
Risk tips: lithium cathode materials business growth is not as expected; customer expansion in the field of electric intelligence is not as expected; the recovery of the automotive industry is not as expected.
