On February 18, the company issued an announcement, introducing Ganzhou Development No.3 New Energy Materials Industry Investment Fund Partnership and Ganzhou Development Wanghao New Energy Materials Industry Investment Fund Partnership to increase the capital of Guangdong Carna by cash means of 400 million yuan and 300 million yuan respectively, holding 4.12% and 3.09% of Guangdong Jiana. After the above strategic investors increase their capital, Guangdong Jiana will raise another 300 million yuan, and a total of 1 billion yuan will be invested in Jiangxi Jiana Energy Technology Co., Ltd., for the construction and operation of Jiangxi Jiana project. After the capital increase, the company will speed up the production capacity construction of the precursor, maintain the rapid development of the company, and maintain the "highly recommended-A" investment rating.

The demand of the three-yuan precursor is strong, seize the opportunity to increase capital and expand production. We estimate that in 2025, the global demand for ternary precursors will be nearly 1.75 million tons, with an annual compound growth rate of 30%. The demand for ternary precursors is strong. Guangdong Jiana, a subsidiary company, is an important manufacturer of ternary precursors in China, with profound products and technical precipitation, and has mastered many key core technologies in the manufacturing field of high-end cobalt-nickel salts and ternary precursors. Excellent and stable product quality, advanced production process and equipment, advanced technology. In order to enhance the competitive strength of Guangdong Jiana and promote the rapid and steady development of the company's lithium materials business, Ganzhou Development No. 3 New Energy Materials Industry Investment Fund Partnership and Ganzhou Development New Energy Materials Industry Investment Fund Partnership are introduced to increase the capital of Guangdong Jiana by cash means of 400 million yuan and 300 million yuan respectively, holding 4.12% and 3.09% of Guangdong Jiana respectively. After the capital increase of the above strategic investors, Guangdong Jiana will raise another 300 million yuan, and a total of 1 billion yuan will be invested in Jiangxi Jiana. It is only used for the construction and operation of Jiangxi Jiana's 100000 tons of ternary precursor production capacity and 20,000 tons of cobalt salt, 30,000 tons of nickel salt and 50,000 tons of battery recovery capacity. The remaining deficiencies in project construction and operation funds will be solved by shareholders and Guangdong Jiana.

New energy business has entered a period of rapid development. On January 14, the company issued a performance forecast that the company expects to make a profit of 495 million yuan to 605 million yuan in 2021, an increase of 717.96% 899.73% over the same period last year. Benefiting from the booming development of the new energy industry, the industry demand continues to improve, with sufficient orders for cobalt salts, ternary precursor products and graphene / carbon nanotube conductive agents, product structure optimization, and a significant increase in gross profit margin compared with the same period last year. The volume and price of sales products are rising, and the prospect is promising. Ceramic materials plate, although under the pressure of fluctuations in the real estate industry, but the company's product sales have increased significantly, and the product market share has been further expanded.

Investment advice: the company's business layout is clear, card position new energy core materials. Ternary precursors fully enjoy the development dividend of the industry, integrated layout, rising volume and price, and capacity expansion, which will open the road of rapid growth. Ceramic business will benefit from the technological upgrading of the industry to obtain new growth space, the leading position is more stable. It is estimated that the net profit of the company will be 7.87 billion yuan in 2023, corresponding to 159.12.1 times PE, which shows the company's performance-price ratio. Continue to maintain the "highly recommended-A" rating.

Risk tips: 1, the growth rate of the industry is lower than expected; 2, the release of ternary precursor capacity is not as expected.