The company issued a major asset purchase report (draft): the company acquired 51% of Ningde Dongheng Machinery by cash, with a transaction amount of 816 million yuan.
Main points of investment
Dongheng deep binding CATL, the company plus lithium metal structure Ningde Dongheng main business for power battery precision metal structure, products are widely used in power battery module shell structure, such as side plate, end plate, master cutting, pressing, film, spraying, welding and other processes, CATL is a key international customer power battery shell structure key supplier. Ningde Dongheng's 2021 revenue reached 904 million yuan, an increase of 118% over the same period last year, and net profit reached 142 million yuan, an increase of 129% over the same period last year. The company is deeply bound with CATL, with sales of 841 million yuan to CATL in 2021, accounting for 93.0% of revenue, maintaining rapid growth and will continue to enjoy the rapid development of CATL. In addition, Ningde Donghengyuan major shareholders promised that the net profit from 2022 to 2024 would not be less than 1.5 billion RMB 160,000,000 yuan respectively, which would significantly enhance the company's profits and form two-wheel drive for equipment and structural components. After the completion of the acquisition, the company's business expanded from the field of new energy battery production line to the field of new energy battery parts, strengthening the new energy power battery industry from customer coordination, production efficiency optimization, technical cooperation and other aspects, and become a major growth point of the company's business in the future.
The strategic goal of ploughing new energy automobile industry at home and abroad
Under the background of "carbon neutralization", with the gradual launch of the plan for automobile companies to stop selling fuel vehicles and the successive implementation of carbon neutralization policies in various countries, new energy vehicles have become the development direction of the automobile industry in the future. From the perspective of overseas markets, the EU will implement a regulation on carbon dioxide emissions of no more than 95g/km for all new cars from 2021; at the same time, it plans to reduce emissions of new cars and trucks by 65% from 2030 to 100% from 2035; and major European car companies will stop selling fuel models by 2035 at the latest. Domestically, China's sales of new energy vehicles reached 3.52 million in 2021, an increase of 160% over the same period last year. With the continuous promotion of national policy, the continuous progress of industry technology and the improvement of charging facilities, there is a huge space for the development of new energy vehicle market. According to GGII, global demand for power and energy storage lithium batteries is expected to be close to 1.9 T in 2025, with a compound growth of 63% between 2020 and 2025. In the field of power battery, the global demand for new energy vehicle power battery in 2021 is about 289GWh. According to the forecast, the global new energy vehicle power battery demand is expected to reach 1380GWh in 2025, and the industry will enter the TWh era. The company's products are mainly for square batteries. SNEResearch predicts that the global market for square battery structures will reach 30.7 billion yuan in 2025, and the company has a huge market space. In the context of the deterministic growth of lithium battery demand, power battery-related raw materials and structural products are also showing rapid growth, the company will fully benefit and open up profit space.
Profit forecast
Considering the impact of the acquisition of 51% equity in Ningde Dongheng, the company's income from 2022 to 2024 is expected to be 2.86 billion yuan, 3.72 billion yuan and 4.71 billion yuan respectively, and the return net profit is 275 million yuan, 407 million yuan and 535 million yuan respectively. The current stock price corresponds to dynamic PE of 24, 16 and 12 times, respectively. Cover for the first time and give a "recommended" rating.
Risk hint
Macro situation and industry development risk; risk brought by intensified market competition; risk of fluctuation of raw material prices; risk of falling product prices; risk of rising labor costs, etc.
