Investment event: recently, Xianhui Technology announcement, since April 7, 2022, the company has obtained orders from Ningde Times and its holding subsidiaries totaling about 807 million yuan.
In the first half of 2022, the company frequently won large orders and made continuous breakthroughs in overseas business. After the company announced on April 7 this year that it had received a total of about 289 million yuan from various contracts and fixed-point notices of Ningde Times and its subsidiaries, the company once again disclosed on August 31 that it had obtained orders for Ningde Times and its holding subsidiaries totaling 807 million yuan. As a result, the company currently has a total of 1.096 billion yuan in Ningde era orders. In addition, the company maintained active development in the European market in the first half of the year, winning important orders for new energy in North America in April, May and July respectively, large orders for new energy batteries of European luxury car brands and large orders for European automobile group giants. As the leading enterprise of lithium battery module / pack automation production line, while focusing on serving domestic lithium power leaders and high-end automobile enterprises, such as Ningde era, Funeng Technology, SAIC Group, FAW Group, etc., the company has been deeply ploughing the German automobile supply chain for a long time, and the automation rate of the production line has reached the top level in the world. With good technical level and price advantages, the company has made continuous breakthroughs in its overseas business.
The acquisition of Ningde Dongheng cuts into the lithium structure, which is expected to create a secondary growth curve. Ningde Dongheng's main products are shell structures such as side plates and end plates of power battery modules. Ningde era, as its main downstream customers, accounts for more than 90% of its revenue. In addition, Ningde Dongheng is a key supplier of power battery shell components for a key international customer in Ningde era, and its products eventually serve well-known brands such as Mercedes-Benz, BMW, Tesla, Inc., Volkswagen and so on. In 2021, Ningde Dongheng realized operating income of 904 million yuan, an increase of 118.23% over the same period last year, a net profit of 142 million yuan, an increase of 130.00% over the same period last year, and a comprehensive gross profit margin of 28.93%. Through the acquisition of 51% stake in Ningde Dongheng, the company will successfully cut into the lithium battery structure business, gain the second performance growth momentum, and form business coordination with the module / pack business, strengthen the service capacity to downstream customers, and further deepen the cooperation with Ningde era.
It is planned to raise an additional 1.135 billion yuan to expand production capacity to effectively support business growth. On August 31, 2022, the company issued a fixed increase plan to raise 1.135 billion yuan for the expansion of automation equipment capacity in Shanghai and Wuhan and the expansion of structural capacity in Luoyuan, Fujian Province. After the completion of the project, the Shanghai factory will increase its area by 42000 square meters, with an annual production capacity of 49 assembly lines by 2026; Wuhan Phase II plant covers an area of 15000 square meters, with an annual production capacity of 20 lines, and its annual income is expected to reach 280 million yuan; Luoyuan plant covers an area of 183000 square meters, with an annual output of 28000000pcs aluminum profile end plates and 30000 sets of new energy equipment assembly fixtures and fixtures The second phase produces 2200000pcs U-frame battery module and 64000000pcs side plate. The improvement of the permeability of new energy vehicles leads to the rapid growth of power battery demand, the improvement of the automation rate of superimposed equipment, the company's orders are expected to increase rapidly, and the increase in production capacity will effectively support the performance of the company.
Profit forecast and investment advice: due to the shutdown caused by the epidemic in Shanghai in the second quarter, the company's periodic income recognition is less, we believe that benefiting downstream battery manufacturers continue to expand production, high demand for equipment, the company serves high-end and high-quality customers, continuous breakthroughs in overseas markets, lithium structure business will bring performance increment for the company. It is expected that the company will achieve net profit of 106 million yuan, 248 million yuan and 392 million yuan respectively from 2022 to 2024, corresponding to EPS 1.39,3.24,5.14 yuan, corresponding to PE 55 times, 23 times, 15 times.
Risk hints: COVID-19 's epidemic situation is repeated, new product expansion is not as expected, market competition is intensified, and downstream battery manufacturers' production expansion is not as expected.