In 2021, the company realized operating income of 2.58 billion yuan, + 28.1% year-on-year, and net profit of 63 million yuan, + 72.4% over the same period last year. The company's PCB chemicals business has a solid position and is expected to continue to benefit from the domestic alternative development trend of the industry. The company has all-round advantages of process technology and recovery channels in the field of lithium recovery, and is expected to achieve rapid growth with the rapid release of production capacity. As the company's lithium battery recycling business has exceeded expectations, it has raised its 2022-2023 net profit forecast to 257,000,000 yuan (the original forecast is 2.07 billion yuan), and increased the 2024 net profit forecast for 2024 to 490 million yuan, corresponding to the EPS forecast of 1.24 yuan. The company's 2022-2024 homing net profit CAGR was 38.08%. According to the 2022 0.8xPEG, the company lowered its target price to 20 yuan and maintained its "buy" rating.
PCB chemical revenue has achieved rapid growth, with significant growth in 2021. In 2021, the company realized operating income of 2.58 billion yuan, an increase of + 28.1% over the same period last year, and a net profit of 63 million yuan, an increase of + 72.4% over the same period last year. Corresponding to the fourth-quarter operating income of 735 million yuan, year-on-year + 21.3%, month-on-month + 7.6%, achieving a net profit of 13 million yuan,-9.9% year-on-year, and-29.7% month-on-month. The decline in performance in the fourth quarter was mainly due to an increase in management, R & D and sales expenses. In 2021, revenue from PCB chemicals, chemical reagents and lithium battery materials reached 17.00,3.06 and 309 million yuan respectively, which was + 63.9%, + 23.0% and + 7.3% respectively compared with the same period last year.
The company's product output was released, but the rise in the price of raw materials led to year-on-year pressure on gross profit margin. In 2021, the company completed production of 50000 tons of PCB chemicals, + 16.0% year-on-year, 19400 tons of chemical reagents, + 7.0% year-on-year, and 18700 tons of lithium battery materials, + 29.0% year-on-year. Affected by the rise in the price of raw materials, the gross profit margin of some of the company's products fell from the same period last year. In 2021, PCB chemicals, chemical reagents and lithium battery materials achieved gross margins of 12.7%, 23.0% and 11.1%, respectively, compared with the same period last year-7.4pcts,-5.9pcts, + 6.2pcts.
Vigorously develop new energy business and accelerate the expansion of lithium battery material recycling business. Under the background of carbon neutralization, the blue ocean market of lithium battery recycling is on the rise, and the industry is expected to develop rapidly. Through independent research and development and long-term technology accumulation, the company has mastered the relevant technologies of gradient utilization and material recycling of lithium-ion batteries, and has a relatively complete industrial chain. The company now has a processing capacity of 1000 tons of lithium iron phosphate, and the production capacity of 10,000 tons is expected to be put into production in mid-2022. Benefiting from the commissioning and volume of new energy materials and new capacity, the company's 2022Q1 realized revenue and return net profit of 7.60 yuan and 35 million yuan, which was + 44.63% and + 234.09% over the same period last year. In addition, the company also cooperates with Glijin Investment to build a new 100000-ton lithium iron phosphate recovery production line, of which 50,000 tons of production capacity is scheduled to start construction in 2022.
Establish a multi-channel recycling system and strengthen industrial chain cooperation. The company cooperates with a wide range of customers, and carries out all-round cooperation with power battery enterprises, lithium battery ladder utilization enterprises and bus enterprises in production line waste and waste batteries to enhance the stability of the company's waste acquisition. In 2021, the company continued to expand its cooperation network and successfully signed a strategic cooperation agreement with Tianjin Lishen and Aodong New Energy. In addition, the company has built a new model of decommissioned power battery operation and launched Huaneng service, which binds the source of waste batteries by providing battery cascade utilization services to commercial vehicles. The first Huaneng service station has been completed in Beijing, which will help to further promote the construction of the company's decommissioned power battery comprehensive utilization industry chain.
Risk factors: the development of lithium recycling industry is not as expected; metal prices fluctuate sharply; capacity release is not as expected; competition in lithium recycling industry intensifies.
Investment suggestion: the company's PCB chemicals business has a solid position and is expected to continue to benefit from the domestic alternative development of the industry. The company has all-round advantages of process technology and recovery channels in the field of lithium recovery, and is expected to achieve rapid performance growth with the rapid release of production capacity. As the company's lithium battery recycling business has exceeded expectations, it has raised the company's 2022-2023 net profit forecast to 257 million yuan (the original forecast is 2.07 billion yuan), and increased the 2024 net profit forecast for 2024 to 490 million yuan, corresponding to the EPS forecast of 1.24 yuan. The company's 2022-2024 homing net profit CAGR was 38.08%. According to the 2022 0.8xPEG, the company lowered its target price to 20 yuan and maintained its "buy" rating.
