Events:
The company publishes its 2022 semi-annual report. 22H1 achieved a total revenue of 1.765 billion yuan, an increase of 52% over the same period last year, a net profit of 82.54 million yuan, an increase of 175%, and a net profit of 78.59 million yuan, an increase of 279% over the same period last year. The company's performance in this period is basically in line with our expectations, and the overall release of lithium iron phosphate capacity has driven a rapid rise in revenue and profits. in the second half of the year, we will focus on the commissioning of the recovery production line of 10,000 tons of lithium iron phosphate in the fourth quarter and the continuous improvement of the company's profitability.
Comments:
Lithium iron phosphate cathode material production line is fully released, lithium battery material has become the main pillar of the company. In 2022, the company fully released 14000 tons of lithium iron phosphate cathode material production line, while the price of lithium iron phosphate soared, driving the rapid growth of lithium battery materials business. The revenue of 22H1 lithium battery materials business was 723 million yuan, an increase of 488.6% over the same period last year, accounting for 41% of the total revenue, surpassing 30pct. The company's PCB chemicals and chemical reagents business achieved revenue of 750 million yuan and 195 million yuan respectively, accounting for 42.5% and 11% respectively.
The dark moment has passed, the gross profit margin has recovered across the board, and profitability is expected to continue to improve. 22H1's business line gross profit margin showed varying degrees of recovery, PCB chemicals business gross profit margin of 12.3%, year-on-year-4.5pct, but month-on-month + 3.1pct; chemical reagent gross profit margin of 29.4%, year-on-year-2.1pct, month-on-month ratio + 0.4pct; lithium materials business gross profit margin of 20.5%, year-on-year + 14.4pct, month-on-month + 6pct: the company's comprehensive gross profit margin returned to 17.5%, year-on-year + 1.1pct, month-on-month + 2.3pct, a two-year high. We believe that the prices of all kinds of metal raw materials will gradually fall after entering Q2, coupled with the company's adjustment of the product structure, will continue to ease the cost pressure; at the same time, the lithium business will be fully released, and iron and lithium prices remain high: the company's profitability is expected to continue to improve in the second half of the year.
Large-scale production of lithium recovery is just around the corner. The company's 10,000 t / a lithium iron phosphate recovery production line will be officially put into production in October, and we expect the production line to be close to full production by the end of the year. The company's lithium iron phosphate recovery technology lithium comprehensive recovery rate of ≥ 95%, and nearly full recovery and recycling of high-quality iron phosphate, so that the gross profit level of the company's lithium iron phosphate recovery business is significantly higher than that of the same company. If it can be successfully put into production on a large scale, it will not only effectively improve the company's profitability, but also accumulate sufficient experience for the company's planned production of 50,000 tons of lithium iron phosphate recovery line in Zhuhai in 2024.
Technical reserve release, test water lithium ferromanganese phosphate. The company announced that it will invest 247 million yuan to build a production line of 36000 tons of lithium ferromanganese phosphate and iron phosphate cathode materials in the existing plant, with a construction period of one year, with an estimated annual revenue of 570 million yuan and a total profit of 78 million yuan. By actively testing the water in the new field of cathode material production, the company is gradually building a closed-loop business of lithium iron phosphate cathode materials from production to recycling, deepening the integration of the battery industry chain.
Investment suggestion: the company's performance in the first half of the year is basically in line with expectations, the company has successfully transformed the field of battery materials, and the business closed-loop model of production and recovery of lithium iron phosphate cathode materials is beginning to take shape. It is estimated that the company's net profit from 2022 to 2024 is 213 million yuan, 424 million yuan and 625 million yuan respectively, corresponding to the EPS of 0.54,1.08,1.59 yuan, maintaining the "buy" rating.
Risk tips: raw material price fluctuations, battery technology route change, new energy vehicle demand is lower than expected and so on.