Event: the company announced and Haitong Hengxin Leasing signed the "Cooperation Agreement on Lithium Battery Recycling Strategy" to jointly build a closed-loop industry chain for lithium power recycling.
H-share large-scale financial leasing company, master new energy vehicles and power battery resources. Haitong Hengxin is the first listed brokerage background financial leasing company in China. As of December 31, 2021, the total balance of interest-bearing assets of Haitong Hengxin reached 94.9 billion yuan. Business areas include transportation and logistics, energy and environmental protection, advanced manufacturing, urban public utilities and other areas. Among them, the average balance of transportation and logistics interest-bearing assets reached 27.2 billion yuan (29%), accounting for the first, the main business direction. Transportation logistics covers green travel, urban transportation and new energy transformation, logistics and transport, business car rental, commercial vehicle rental, online car rental and other fields. Haitong Hengxin has mastered large-scale transportation and logistics assets and has large-scale new energy vehicles and power battery resources.
Significant strategic cooperation has been achieved to create a closed loop for lithium recovery and recycling. According to the strategic cooperation agreement, the two sides will be based on Haitong Hengxin's operational leasing and financial leasing business in the battery field (including power batteries and energy storage power stations) and Tianqi's professional ability of battery recycling, jointly carry out comprehensive cooperation, including battery recycling system construction, battery recycling and disposal, jointly build and share recycling service network, and expand and strengthen battery recycling business. In addition, the two sides are considering further docking cooperation to extend to battery financial and ecological businesses such as power and energy storage to provide financing, operation and maintenance, and exit overall closed-loop services for lithium battery terminal application scenarios.
The channel is further expanded to lock in the resources of battery asset management service providers. This cooperation is an important expansion of the company's recycling channels for battery asset management service providers to further lock in waste sources. Prior to the company's landing cooperation at the channel end, including vehicle enterprises (FAW Group), Internet + e-commerce (JD.com technology), light vehicle lithium faucet (Xing Heng Power supply), the channel layout gradually landed.
Lithium cycle long slope thick snow, the company's rapid capacity expansion & accelerated channel layout. The lithium cycle has increased by 18% over the past 15 years, and the space of long slope and thick snow is nearly 300 billion in 2035. The production capacity of Jintai Pavilion will be expanded to 50,000 tons of waste ternary batteries in the second half of 2022, and the first phase of the 150000 ton waste lithium iron phosphate battery project is expected to be completed in March 2023. The Longnan Economic Development Zone project will be dominated by waste lithium battery raw materials, forming a ternary precursor project of 30,000 tons per year and battery-grade lithium carbonate of 120,000 tons per year. Capacity expansion to match the channel layout to ensure the utilization rate of project capacity.
Profit forecast and investment rating: we maintain a net profit of 349,558 million yuan in 2022-2023, and it is estimated that the net profit in 2024 is 653 million yuan, corresponding to an EPS of 0.92 yuan 1.47x1.72 yuan in 2022-2024. The current market capitalization corresponds to 10.3 times the 2022-2024 PE 19.3 Universe 12.0 Universe. Maintain a "buy" rating.
Risk hint: sales of new energy vehicles are not as expected, the progress of the project is not as expected, and competition is intensified.