Cathode material has become an important business growth pole of the company. Dragon technology's original business is fine automotive chemical supplies with steady growth, and it has merged the business of lithium iron phosphate cathode materials in 2021, and has now become the leading supplier of lithium iron phosphate cathode materials for new energy batteries in the world. under the background of the new energy industry in China, the company has seized the opportunity to actively layout in the new energy field and realized the great-leap-forward development of revenue. According to the 2022 report, the lithium iron phosphate business contributed 85% of the revenue and 91% of the net profit to the company.
Lithium iron phosphate share expansion, prosperity, industry dividend is expected to be distributed to the head. Lithium iron phosphate cathode material is more and more favored by downstream manufacturers because of its high safety, low cost and increasing energy density, and its market share increases rapidly. we believe that the re-outbreak of lithium iron phosphate cathode material industry in 2021 is not a flash in the pan, and will continue to maintain the share advantage of ternary lithium. We estimate that the world demand for lithium iron phosphate will be 80,127,191 and 2.9 million tons respectively in 2022, with a compound annual growth rate of 38%. The head enterprises have the advantage of first-mover in terms of products and customers, and the production capacity planning is forward-looking. Accelerated shipments during the industry dividend release period.
The company's core products make up for the shortcomings of the industry, leading capacity planning, cost advantages may appear, and the industry position will be further consolidated. The company's core products: iron lithium No. 1 has breakthrough advantages such as good low temperature performance and fast charging performance, which can effectively make up the short plate of lithium iron phosphate cathode material. At present, the company has an annual production capacity of 85000 tons, with a long-term planned production capacity of nearly 500000 tons, and its leading position continues to be consolidated. At the same time, the upstream layout will achieve self-supply of half of the raw materials, and the cost advantage may show. In the future, it will lead the development of the industry in all aspects such as technology, market and production capacity. It is expected that this sector will continue to contribute most of the company's net profit in the future.
The company has obvious advantages and a solid position in the fine automotive chemical supplies industry. The company has certain advantages in the field of lubricating oil segmentation. Longyi, Sonic and Dick Chemical and other brands have a certain popularity in the market, with a number of car companies OEM certification, while the company also timely launched a series of new energy vehicle products according to the downstream market situation, the company is expected to use channel products and other advantages to seize the first opportunity in the incremental market. Thanks to increasingly stringent emission regulations, the automotive urea industry will maintain steady growth in the future. Dragon Technology, as a leading enterprise, leads the development of the industry in terms of products, customers and marketing, and is expected to continue to maintain a leading edge in the market in the future.
Company profit forecast and investment rating: we expect the company's return net profit from 2022 to 2024 to be 9.15,9.73 and 1.078 billion yuan respectively, corresponding to EPS 1.62,1.72 and 1.97 yuan respectively. The current stock price corresponds to the PE value of 19.28,18.12 and 16.36 times from 2022 to 2024, respectively. Optimistic about the company changing lanes overtaking, the rapid development of new energy business, the future industry position is expected to be further consolidated, for the first time to cover the "strongly recommended" rating.
Risk tips: downstream demand is lower than expected; the company's capacity release rate is not as fast as expected; industry overcapacity is higher than expected.
