Main points of investment:

Maintain the overweight rating. The company has been blessed again by the Ningde era, which will contribute to the future growth of the company.

We maintain the EPS of 0.56,1.22,1.61 yuan in 2021-2023, maintain the target price of 61.53 yuan, and maintain the overweight rating.

Ningde era to increase holdings, the company's future growth is expected. Ningde Times subscribed for the sublimation technology stake in Fulin Seiko subsidiary for RMB 144 million. After the capital increase is completed, Ningde Times will hold a 20 per cent stake in Jiangxi sublimation. The capital increase in Ningde era will help Fulin Seiko continue to expand its production capacity in the future and form a deep binding with downstream customers.

Long-term production capacity planning has increased significantly. Q4 Suining 50,000 tons was put into production and started the second phase in 21 years. At present, the production capacity of 50,000 tons has been fully electrified and started to climb the slope. The company has a production capacity of 12,000 tons per year in Jiangxi and 50,000 tons in Suining. 60,000 tons of Suining Phase II will be completed and put into production in 2022, with a long-term planning of 312000 tons.

The upstream layout will be gradually advanced, and the cost reduction can be expected. Through the method of replacing lithium carbonate with lithium phosphate, the company is expected to greatly reduce the cost of lithium iron phosphate, and the equity and strategic cooperation between Hengxin Rong, the upstream lithium resource terminal, is gradually recommended, and will continue to increase capital and expand production in 2022, to achieve the supply guarantee of lithium phosphate at the resource end, and the reduction in 2022 is worth looking forward to.

Risk tips. Subsidy policy slope risk, competition aggravation risk, technology route risk.