Investment logic

Lithium materials: the governance focuses on the core business, and the new material is expected to shift faster. In the early stage, the company carried out diversified layout, such as the layout of conductive agent, ternary cathode, hydrogen energy, mica lithium extraction and other industries, hydrogen energy-mica lithium extraction has begun to gradually peel off and began to focus on conductive agents and ternary precursors. The conductive agent-ternary precursor is combed in many aspects in terms of organizational structure, production capacity expansion and strategic layout acceleration.

1) Conductive agent: carbon tube global penetration, the company accelerates to catch up. Under the trend of silicon-based fast charging, carbon tube infiltration is accelerated, and we estimate that the global demand for carbon tube slurry is expected to exceed 470000 tons in 2025. The subsidiary of the company entered the supply chain such as BYD with graphene-carbon tube (mainly outsourced in the early days) composite products. In terms of technology, it has been developed to the fifth generation of single-walled carbon tubes, and 750 tons of powder production capacity will be added by the end of 2021. In 2021, the company used equity incentive to bind Wang Kunming, the core figure of conductive agent, to integrate carbon materials into Griffin platform to further improve the layout of conductive agent industry chain.

2) precursor: the release of production capacity is accelerated and the integration continues to deepen. Production capacity: the company has set up a five-year plan with a target capacity of 500000 tons in 2025, with an average annual production capacity of 100000 tons. Integration: the introduction of local war investment to provide financial support, the company has a solid industrial chain foundation in cobalt integration, continue to increase the integrated layout of upstream nickel and cobalt resources, the cost side is expected to be further optimized.

Traditional ceramic materials: the leading position is stable, and the market share is expected to increase. In recent years, the downstream ceramic tiles have gradually entered the stock period, but the requirements for material quality are constantly improving. with the continuous clearance of production capacity, it is expected to promote the concentration of the ceramic material industry. The company is the leader in the ceramic materials industry, and its share is expected to increase.

Investment suggestion

We estimate that the net profit of the company from 2021 to 2023 is 5.55,7.41 and 948 million yuan, corresponding EPS is 0.96,1.28,1.64 yuan, and corresponding PE is 23.70,17.8,13.9 times. We use the PE valuation method to value the company as a whole in 2022, with a target price of 44.80 yuan, covering it for the first time and giving the company a "buy" rating.

Risk hint

Downstream demand is less than expected risk, industry competition pattern deterioration risk, capacity construction is not as expected risk, new customer expansion is not as expected risk.