Lithium electricity industry drives the rapid growth of copper foil demand
In 2021, the annual production capacity of electrolytic copper foil in China was increased by about 116000 tons, and the total annual production capacity reached 721200 tons, an increase of 19.17 percent over the same period last year. It is estimated that by 2022, the production capacity of electrolytic copper foil in China will be 1.1032 million tons, an increase of 52.97 percent over the same period last year. In 2021, China's new energy vehicle industry entered an explosive period, with the increase of national investment in clean energy, increased market demand for energy storage batteries, lithium copper foil as an important raw material shipments significantly increased. According to GGII data, China's lithium copper foil shipments reached 280500 tons in 2021, an increase of 124.4 percent over last year.
The company also has the production capacity of the whole copper foil production line and extremely thin copper foil the company has the ability of process layout, core equipment design and optimization of the process from dissolving copper solution to producing foil, helping the company to upgrade its product technology. as of June 30, 2022, the company has 97 patents and 2 software copyrights. Business development needs to match a number of core technologies designed and modified around additives and production equipment, which can effectively help the company's product technology upgrading and scale expansion.
Approved by the head customers, the new capacity is put into production to ensure the follow-up performance growth of the company's extremely thin lithium copper foil of 6 μ m and below, and has become one of the important copper foil suppliers in Ningde era. The total production capacity of the company at the end of 2021 is 24500 tons. At present, 18000 tons are under construction and are divided into three phases. The first phase, 5000 tons, was completed and put into production in June this year, while the remaining two and three phases, each with 6500 tons, are scheduled to be completed and put into production in September and December, respectively.
For the first time, coverage will be rated as "overweight".
We estimate that from 2022 to 2024, the company will achieve operating income of 3.2 billion yuan (an increase of 45.69% over the same period last year), 4.63 billion yuan and 6.513 billion yuan, with a compound growth of 43.65% in the next three years based on 2021. The net profit attributable to the parent company is 483 million yuan (26.75% year-on-year growth), 686 million yuan and 982 million yuan. The total share capital is 101 million shares, corresponding to 4.79,6.79 and 9.72 yuan of EPS. For the first time, we give a "overweight" rating.
Risk hint: the production of new projects is not as expected, and the sales of new energy vehicles are not as expected.
