A description of the event. On August 7, 2022, the company released its semi-annual report. In '22, H1 achieved revenue of 942 million yuan, an increase of 146.72% over the previous year, achieved a net profit of 93 million yuan, an increase of 117.52% over the previous year, net profit after deducting non-return net profit of 89 million yuan, an increase of 134.21% over the previous year. The performance was in line with our expectations.
The performance growth rate for the second quarter was remarkable. Revenue and net profit: The company's revenue in 2022Q2 was 491 million yuan, up 117.35% year on year, up 8.78% month on month; net profit at home was 56 million yuan; net profit increased by 148.74% year on year, up 53.20% month on month; net profit after deducting net profit after deduction was 53 million yuan, up 155.10% year on year, and 49.46% month on month. Gross profit margin: 2022Q2 gross margin was 20.03%, -6.50 pcts year on year, -0.37 pcts month on month.
Net interest rate: 2022Q2 net interest rate was 11.40%, +1.40 pcts year on year, +3.30 pcts month on month. Fee rate:
The company's expense rate for the period 2022Q2 was 11.78%, +1.29pcts year on year. Among them, sales, management, R&D, and financial expenses rates were 3.31%, 4.20%, 2.92%, and 1.36%, respectively, and -0.78 pct, +1.42 pcts, +0.28 pct, and +0.38 pct.
The cost of anode materials is under pressure, and integrated production capacity is steadily increasing. Affected by the rise in the popularity of downstream new energy vehicles, the price of raw materials required for graphite anodes, the company's main product, has risen sharply since 2021, the cost of external processing costs for graphitization with artificial graphite has increased dramatically, and the cost side pressure has increased. The gross profit margin in Q22 was 20.03%, -0.37 pct, year-on-year -6.50 pcts. The company is increasing efficiency by actively establishing multiple raw material channels, developing a new generation of van-type furnace graphitization processes, and arranging self-built graphitization production capacity. In terms of graphitization, the company has planned a total production capacity of 155,000 tons, of which 3,000 tons have been fully produced, 12,000 tons are expected to be produced within this year. Sichuan Xiangfenghua has a total production capacity of 140,000 tons, the first phase is being actively promoted, and the second phase plans to build 80,000 tons. In terms of anode materials, the company already has a production capacity of 35,000 tons, with a total planned construction capacity of 170,000 tons of anode materials. It is expected to be completed in January 2023, and the construction of an integrated project for 140,000 tons of artificial graphite anode materials in Sichuan will be sixty six times 10,000 tons, The second phase is 80,000-ton construction.
Actively lay out new materials and high-quality customer resources. In terms of technical routes, the company adheres to a technical line that places equal emphasis on natural graphite and artificial graphite. In addition, it is also involved in new carbon material technologies such as silicon carbon anode, hard carbon anode, B-type titanium dioxide, and graphene. In terms of silicon carbon anode materials, the company has reserves for both pure silicon and silicon oxide anode technology routes. Currently, the products have been recognized by customers and have industrialization conditions. On the customer side, the company has accumulated many high-quality customers such as LG, BYD, Guoxuan Hi-Tech, and Polyfluoride. It is currently contacting internationally renowned battery companies such as Korea's SKI and Japan's Panasonic to actively expand the international market.
Investment suggestions: We expect the company to achieve revenue of 27.38, 40.24, and 4.694 billion yuan in 2022-2024, with year-on-year growth rates of 144.9%, 46.9%, and 16.7% respectively, and net return profit of 335, 484, and 574 million yuan, with the same increase of 235.6%, 44.5%, and 18.5%. The corresponding PE price is 17, 12, and 10 times. Considering the company's steady downstream growth, the production capacity layout of graphitization and anode materials is accelerated, and the “recommended” rating is maintained.
Risk warning: Terminal NEV sales fell short of expectations, raw material price fluctuations exceeded expectations, and production capacity building for graphite and anode materials fell short of expectations.