The company released a performance forecast for the third quarter of 2021. It expects to achieve net profit of 386 million yuan to 501 million yuan in the first three quarters of 2021, an increase of 539%-730% over the same period last year, and to achieve net profit of 160 million yuan to 195 million yuan in the third quarter, far exceeding 35.13 million yuan in the same period last year. Non-recurring profit and loss during the reporting period was $4.41 million. Maintain a “Highly Recommended - A” investment rating.
The advantages of the strategic layout of new energy materials have been highlighted, orders are sufficient, and volume and price have risen sharply. In terms of cobalt salts and tertiary precursors, the subsidiary Jiana Energy has the capacity to prepare high-nickel large-monocrystalline cathode precursor materials. The monthly production capacity of high-nickel products has exceeded 1,000 tons. In the first three quarters, Jana Energy grasped changes in market demand and continuously adjusted its product structure, taking advantage of the company's high-nickel products. The sales growth rate was obvious, and its share in the Sanyuan driver sales structure increased significantly. While its performance growth was impressive, it maintained a healthy and good development trend. In terms of graphene and carbon nanotube conductors, the subsidiary Qingdao Haoxin continues to focus on R&D and innovation with market drive and customer orientation as the core. The company went from technology optimization to product development extension, and made breakthroughs step by step from powder to slurry to develop single-walled carbon nanotube conductors with high length-to-diameter ratio and high conductivity. Laboratory sample preparation has now been completed. At the same time, with its own technical advantages and the market competitiveness of its products, it successfully passed the supplier qualification examinations of many well-known lithium battery companies, and made major breakthroughs in market development.
Ceramic materials are growing against the market. In the ceramic materials sector, despite being pressured by fluctuations in the real estate industry, the company's product sales increased dramatically, and the product market share was further expanded.
Meet the rules of the industry and actively expand production. The company already has a production capacity of 32,000 tons of tertiary precursors. After completion of the construction and proposed renovation and expansion projects, production capacity will reach about 50,000 tons in 2021.
Develop group management and strengthen fine control. Establish a lean manufacturing department, a project development center, and an information system department to improve the group's management structure. By optimizing the functional positioning of the group headquarters and subsidiaries, strengthening the Group's overall management capabilities, focusing on financial control and risk management of subsidiaries, and improving the overall level of operation and management of the Group through mechanisms such as comprehensive budget management, reporting and supervision of important matters.
Investment advice: The business layout is clear, and the card is the core material for new energy. Sanyuan carbide has fully enjoyed the industry's development dividends. It has an integrated layout, volume increases and prices are rising. Starting this year, production capacity will expand, which will start a path of rapid growth.
The ceramics business will benefit from technological upgrading in the industry to gain new growth space, and its leading position will be more stable. By splitting the company's business into different segments, different valuations were given. The corresponding valuations for the three yuan driver+cobalt salt+copper products/conductive agents/ceramic materials sectors in 2022 were 200/78/2 billion yuan respectively, with a corresponding target market value of 29.8 billion yuan, corresponding to a reasonable target price of 52 yuan. 2021 will be the starting point for rapid growth in the company's performance. Continue to maintain the “Highly Recommended - A” rating.
Risk warning: 1. The growth rate of the industry is lower than expected; 2. The release of carbide production capacity falls short of expectations.