Incident: The company released the 2022 semi-annual report. 22H1 achieved operating income of 942 million yuan, up 147% year on year; corresponding to 22Q2 achieved operating income of 491 million yuan, up 117% year on year, up 9% month on month; 22H1 achieved net profit of 93 million yuan, up 118% year on year; corresponding 22Q2 achieved net profit of 56 million yuan, up 149% year on year, up 51% year on year; 22H1 achieved non-deducted net profit of 188 million yuan, up 132% year on year; corresponding to 22Q2 achieved non-deducted net profit The parent net profit was 53 million yuan, up 155% year on year and 49% month on month. The performance was in line with expectations.
The gross margin was basically the same month-on-month, successfully withstanding the risk of price increases for raw materials. 22H1. Affected by the increase in oil prices, the prices of needle coke and petroleum coke, which are the main raw materials for the company's artificial anode products, have risen sharply. Among them, the price of needle coke increased from 101,000 yuan/ton at the beginning of the year to 13,800 yuan/ton, and the price of petroleum coke increased from 0.28 million yuan/ton to 0.52 million yuan/ton. Furthermore, the price of graphitization and the price of flake graphite, a raw material for natural graphite anodes, have also risen quite significantly, causing significant pressure on the cost side. In 22Q2, the company's gross sales margin reached 20.0%, down only 0.4 pp from 22Q1. The pressure on the cost side was smoothly transmitted downstream. After excluding the disturbance of credit impairment losses, the company's negative product 22Q2 unit profit was basically the same as 22Q1.
Downstream demand is strong, and accounts receivable are repaid well. According to SNE Research statistics, 22H1's main customer, LG's new energy power battery installed capacity was 29.2 GWh, an increase of 7% over the previous year; the installed capacity of BYD's power battery was 24.0 GWh, an increase of 206% over the previous year. The rapid increase in power battery production capacity has led to an explosive increase in demand for anodes, and the supply of the company's products is in short supply. 22H1, the company's accounts receivable were well repaid. Credit impairment losses decreased by 39 million yuan over the same period of the previous year, a decrease of 324%. 22H1. The final balance of the company's bad debt preparation period was 41 million yuan, of which the balance of accounts receivable from major customers BYD and LG was about 263 million yuan, totaling 103 million yuan, if. According to estimates, the balance of accounts receivable from remaining customers is about 138 million yuan, with an average account age of about 2 years. Since the current balance of bad debts is small, and as the company adheres to the big customer strategy, the account age structure may continue to improve, the company's financial performance is expected to stabilize and improve.
Production capacity construction is progressing steadily, and the company's raw material inventory has increased dramatically to welcome production in the second half of the year. 22H1. The company's production capacity increased steadily compared to 2021, reaching 70,000 tons/year. According to estimates, in the future, as the production capacity construction of the Sanming base and the Sichuan base gradually progresses, the production capacity is expected to reach 85,000 tons by the end of the year, and it also has 75,000 tons of graphite production capacity. The company's raw material inventory balance at the end of the 22H1 period reached 101 million yuan, an increase of 173% from 37 million yuan at the beginning of the period. Furthermore, there was a significant increase in the balance of products and inventory goods. “Gold 9, Silver 10” is the peak sales season for the automobile industry. The company has sufficient inventory at all stages, and is expected to concentrate on meeting customer procurement needs. As 22H2's production capacity construction progresses further, the company is expected to ship more than 50,000 tons of 22H2 graphite anode materials.
Profit forecasts and investment recommendations. The company is actively expanding production capacity, optimizing the company's product structure, and increasing graphitization support to reduce costs and increase efficiency to further enhance the company's profitability. Considering the company's excellent customer quality and the company's steady expansion of production in the future to actively meet market demand, we maintain our “buy” rating.
Risk warning: risk of fluctuations in raw material prices; risk of shortage of graphitization supply; risk of external processing; risk of falling company gross margin; risk of accounts receivable.