Event
The company released its 2021 annual report on April 21, saying that in 2021, the company achieved 2.58 billion yuan in operating income, an increase of 28.09 percent over the same period last year, and a net profit of 62 million yuan, an increase of 72.40 percent over the same period last year.
Comment
The leading position of PCB chemicals was consolidated, and the gross profit margin of lithium battery plate increased. As a leading enterprise of PCB chemicals, the company currently has a production capacity of 50, 000 tons of PCB chemicals and maintains a full production capacity; the company's PCB chemicals sector revenue reaches 1.7 billion yuan, and the proportion of business remains high. The gross profit margin of the company's lithium battery board industry increased rapidly, reaching 11.12%, up 6.22 percentage points from 2020, and the gross profit margin increased significantly.
A number of businesses go hand in hand, and the lithium materials project continues to advance. In terms of PCB chemicals, as the company continues to promote the integrated sales and service model of "PCB Manufacturing Technology Integrated solution", the performance of this sector has increased significantly in 2021. In terms of the utilization of decommissioned batteries, the company signed a "Strategic Cooperation Agreement" with Olympic New Energy, Lishen Battery and other enterprises in 2021 to promote the construction of its decommissioned power battery comprehensive utilization industry chain. In terms of lithium battery materials, the company plans to raise 1.25 billion yuan to invest in the construction of high-performance lithium battery materials in Zhuhai, and plans to build a comprehensive recovery production line with an annual output of 50,000 tons of iron phosphate and 11500 tons of lithium carbonate.
Lithium battery recycling industry is booming, and the company's performance is expected to continue to grow. In recent years, the new energy vehicle industry has developed rapidly. According to the data of the Power Battery Industry Innovation Alliance, the number of lithium battery vehicles installed in China reached 154.5GWh in 2021, an increase of 143% over the same period last year. According to the China Automobile Association, sales of new energy vehicles in China exceeded 3.5 million in 2021, an increase of 156% over the same period last year. With the continuous growth of the new energy vehicle industry, the current power battery recycling industry is in a strong growth stage. According to our forecast in the previous report, the total scale of power battery recycling is expected to reach 107.43 billion yuan in 2030.
The company's waste lithium battery recycling project enables the company to fully recycle lithium carbonate and iron phosphate. According to Baichuan Yingfu, as of April 20, 2022, iron phosphate was quoted at 25,000 yuan per ton, up 92.31% from the same period last year. Lithium carbonate is quoted at 475,000 yuan / ton, up 431.05% from the same period last year. It is expected that with the continuous growth of the domestic lithium battery recycling industry and the gradual landing of the company's related projects, the company's profits will continue to grow.
Investment suggestion
The business growth of the company is clear. It is expected that the net profit of 2022, 2023, and 2024 will be 1.84, 435, 612 and 0.47, respectively, respectively. The EPS will be 1.11, 1.56, and the share price PE of April 21, 2022 will be 32.66, 13.81, 9.82 times, respectively. Maintain the "highly recommended" rating.
Risk hint
The policy fell short of expectations, the sales of PCB chemicals fell short of expectations, and the release of production capacity fell short of expectations.