Event

The company issued an equity incentive plan for 2022: the grant price is 26 yuan per share, and the performance target of 2022 / 2023 / 2024 is 3 / 400 million yuan respectively.

Main points of investment

The battery of light vehicle operates steadily, and the new star of energy storage is rising.

The company is mainly engaged in energy storage, light vehicle lithium battery, consumer battery, lithium battery and other business segments, the company's income has doubled in the past three years, and the company's income has reached 2.2 billion yuan / yoy+55% in 2021. From the perspective of income structure, in 2021, the company's light vehicle battery income of 1.2 billion yuan / yoy+88%, accounted for about 55%, consumer battery income of 600 million yuan / yoy+14%, accounted for 27%, battery income of 130 million yuan / yoy+19%, accounted for 6%, and energy storage income of 130 million yuan / yoy+140%, accounted for about 6%. From the perspective of segment growth, the company's light vehicle business has benefited from the rapid growth of the European market, while the energy storage market has benefited from strong demand in the United States and other European and American markets. The company has seized the market dividend to achieve more than double growth.

On the whole, the company is actively consolidating its business in the European light vehicle market, with a market share second only to Bosch, accounting for about 20%, and is still expected to achieve good growth in the future. In addition, the company pays close attention to the dividend of the energy storage market, and is expected to more than double its growth in 2022, and its revenue share is expected to exceed 10%. With the continuous expansion of the energy storage market, the proportion of the company's energy storage business is expected to continue to increase.

Increase the capacity to expand, speed up the pace of business development

Cade New Energy, a subsidiary of the company, mainly produces batteries, with a current output value of about 300 million yuan.

The company actively increases the production capacity of large cylinders and plans to invest 3 billion yuan in the construction of battery and energy storage headquarters base. In addition, the company's light vehicle lithium-ion battery project is scheduled to be put into production in the middle of the year. After the listing of the company, the capital expenditure increased, the company's capital expenditure exceeded 300 million yuan in 2021, the 2022Q1 was 100 million yuan, the company's 2022Q1 fixed assets was 133 million yuan, the project under construction reached 207 million yuan, and the production capacity expansion accelerated obviously. In addition, in terms of the layout of the industrial chain, the company has formed strategic cooperation with LG to ensure the supply and demand of raw materials. The company attaches importance to research and development, R & D expenditure of about 100 million yuan in 2021, investment intensity of about 5%, with technology as the core, constantly optimize internal processes and enhance product competitiveness.

The company actively increases the production capacity expansion to ensure the orderly growth of the company's business; the company takes technology and products as the core to form cooperation with excellent companies in the industrial chain to ensure the security of the supply chain.

Actively optimize governance, equity incentives demonstrate long-term growth confidence that 2022Q1 achieved an income of 550 million yuan / yoy+20%, and a net profit of 25 million yuan / yoy-46%, mainly due to the sharp rise in raw material prices, resulting in a gross profit margin of 16% of 2022Q1 from 20% in 2021. Equity incentives lock in outstanding talents and strengthen corporate governance. The company granted 934000 restricted shares to 128 people on May 19, 2022, accounting for about 0.9% of the total share capital of the company, with a grant price of 26 yuan per share. In terms of assessment, the income assessment accounts for 60%, and the profit assessment accounts for 40%, of which the company's 2022 / 2022 / 2023 / 2024 target deduction of non-return net profit is 2 trillion / 600 million yuan.

Overall, we believe that with the gradual transmission of the company's cost pressure, the company's overseas business accounts for more than 50% in 2021, and the devaluation of the RMB is expected to have a positive impact. Looking forward to the second quarter and the second half of the year, the company's performance is expected to continue to improve. The company actively locks outstanding talents, the governance structure is constantly optimized, and the assessment goal is high, demonstrating long-term growth confidence.

Profit forecast

It is estimated that the return net profit of 2022Universe 2023 / 2024 is 1.9 / 400 million yuan respectively, and the eps is 2.99 RMB 4.05 yuan, and the corresponding PE is 25-17-12 respectively.

Based on the company's high-quality track, light vehicle battery has a prominent position in the European market, actively develop energy storage business in the United States and Europe and other places, equity incentives demonstrate long-term growth confidence, we are optimistic about the company's long-term development opportunities and give "recommended" rating.

Risk hint

Risk of policy fluctuation; lower-than-expected downstream demand; lower-than-expected product prices; risk of deterioration of the competition pattern; capacity expansion and digestion is not as expected.