Event: Fengyuan shares disclose the 2022 semi-annual report.
The results in the first half exceeded expectations, with an increase of nearly 30% in the second quarter compared with the previous quarter. 2022H1, the company realized revenue of 710 million yuan, year-on-year + 126%; net profit of 94 million yuan, + 316%; and deduction of non-return net profit of 93 million yuan, + 318%. The results were close to the upper limit of the previous forecast range and exceeded expectations.
2022Q2, the company realized revenue of 433 million yuan, month-on-month ratio of + 56%; net profit of 54 million yuan, month-on-month ratio of + 32%; non-return net profit of 52 million yuan, month-on-month ratio of + 27%.
Profitability has increased significantly. 2022H1, the company's gross profit margin is 24.94%, year-on-year + 10pcts; net profit rate is 13.26%, year-on-year + 6pcts. Under the influence of comprehensive factors such as product structure optimization, scale effect and proper cost control of raw materials, the company's profitability has increased significantly compared with the same period last year.
The 940 million increase has been approved, which is expected to accelerate capacity construction and reduce financial cost pressure. The company's 940 million yuan fixed increase project has been approved by the CSRC to raise funds for the 50, 000-ton iron lithium project and supplementary current assets in Anqing, Anhui province. The landing of the fixed increase is imminent, which is expected to further help the company build new production capacity, ease the pressure on the company's liquidity, and reduce financial costs.
Yuxi iron lithium production capacity of 50,000 tons in one step, the company's total iron lithium production capacity of 125000 tons at the end of the year. According to the company's semi-annual report, the company's lithium iron phosphate production capacity is expected to accelerate this year. The production capacity of 40,000 tons of iron lithium in Zaozhuang and 25000 tons of iron and lithium in Anqing Phase I is expected to be put into production by the end of August and September, respectively. The first phase of Yuxi has been changed from batch construction to one-off construction of 50,000 tons of iron and lithium, which is expected to be put into production by the end of November. High nickel ternary 8000 tons is expected to enter the equipment commissioning stage by the end of July. It is estimated that by the end of the 22nd, the company's total production capacity of lithium iron phosphate will reach 125000 tons (previously planned for 100000 tons, and the Yuxi project will contribute 25000 tons more in one step), with a conventional output of 5000 tons and a high nickel content of 10,000 tons.
New products continue to advance, and a new pilot base will be built in the third quarter. The company's technical team includes Professor Wang Kunpeng's team, the Institute of Green Energy of the Chinese Academy of Sciences (Academician Chen Liquan is honorary dean), Dr. Kim Youcheng of Korea and other professional R & D teams. around the single crystal cathode, 9-series ternary, lithium ferromanganese phosphate, solid-state battery materials, sodium ion cathode materials and other new products continue to develop. The company will build a pilot test base for cathode materials in the third quarter of this year, and put new products into the base for pilot testing. Technologically mature products will be directly put into the production line according to customer needs.
Profit forecast and valuation: from 2022 to 2024, we expect the company to achieve a net profit of RMB 2.69 million, an increase of 407.2%, 154.8% and 36.9%, respectively, compared with the same period last year, corresponding to a PE of 35.7, 14.9 and 10.2 times, respectively, maintaining the "buy" rating.
Risk hints: downstream demand is lower than expected; company capacity construction is not as expected; market competition aggravates risk; raw material price fluctuation risk