Investment event
In the first half of 2022, the company achieved operating income of 1.765 billion yuan, an increase of 52.0% over the same period last year, a net profit of 82.54 million yuan, an increase of 174.66% over the same period last year, and a net profit of 78.59 million yuan, an increase of 279.33% over the same period last year. Of this total, the operating income in the second quarter was 1.005 billion yuan, up 58.09 percent over the same period last year; the net profit returned to the mother was 47.23 million yuan, up 142.43 percent over the same period last year; and the non-return net profit was 44.69 million yuan, an increase of 246.62 percent over the same period last year.
Main points of investment
Lithium battery materials accounted for a substantial increase in revenue, with a solid foundation for medium-term performance growth. In the first half of 2022, the company's lithium battery materials revenue was 720 million yuan, an increase of 489 percent over the same period last year; revenue accounted for 41 percent, up 30 percentage points from the same period last year, and has become the company's core growth point; gross profit margin 20.5 percent, an increase of 14.5 percent over the same period last year, mainly benefiting from the high price of lithium battery materials and the increase in production capacity. The recovery production line of 10,000 tons of lithium iron phosphate in Shantou will be put into production in the second half of the year, and a recovery line of 50,000 tons of lithium iron phosphate (corresponding to the production capacity of 50,000 tons of iron phosphate and 11500 tons of lithium carbonate) is being built in Zhuhai, and the recovery capacity will be greatly expanded in the past two years. The company's medium-term performance growth has a solid foundation.
The company has the technical reserve of synthesizing lithium ferromanganese phosphate in 2018 and now has large-scale production capacity. The product has the advantages of high safety, good low temperature resistance, high energy density and so on. The company announced synchronously on August 25 that it intends to invest 247 million yuan to build an annual output of 36000 tons of lithium ferromanganese phosphate and ferric phosphate cathode materials in the existing plant area of Shantou, with a construction period of 12 months. after the completion of the project, the annual income is estimated to be 570 million yuan, and the total annual profit is 78 million yuan.
We believe that the company has a deep accumulation of cathode material generation and recovery technology, is accelerating the transformation to the field of new energy lithium materials, and gradually build a phosphoric acid cathode material production cycle system.
PCB chemicals and chemical reagents accelerate the layout of high-end areas, benefiting from domestic alternative acceleration of 750 million yuan in the first half of 2022, down 3.4% from the same period last year, accounting for about 42% of revenue and 12.3% of gross profit margin; the company's "overall solution for PCB manufacturing technology" is leading in strength and is accelerating the transformation and upgrading to IC packaging, 5G and other high-end fields, benefiting from the promotion of domestic substitution. In the first half of the year, the business income of chemical reagents was 190 million yuan, an increase of 38.7% over the same period last year, with a gross profit margin of 29.4%. The company has ultra-clean high-purity chemical reagents as production capacity, and high-end technology continues to advance.
Profit forecast and valuation
The recovery of lithium materials has become the core business of the company, and the positive production system of phosphoric acid system has been gradually constructed. We maintain the company's profit forecast and expect the company's return net profit in 22-24 to be 2.42,4.59 and 712 million yuan, corresponding to EPS of 0.61,1.17,1.81 yuan per share, and the current share price corresponding to PE of 36,19 and 12 times respectively, maintaining the "buy" rating.
Risk hint
The risk of new product and new technology development; the intensified competition in the recycling industry; the risk of material price fluctuation.