Event: Wanshun new materials issued an announcement on November 23 that its wholly-owned grandson company, Anhui Zhongji, signed a "Cooperation Framework Agreement" with Ningde Times. During the period from January 1, 2023 to December 31, 2026, Anhui Zhongji promised to supply lithium aluminum foil to the Ningde era, with a minimum supply of 320000 tons, and the final supply and price shall prevail according to the subsequent specific orders of both parties.
4 years battery aluminum foil cooperation framework agreement, in-depth cooperation with high-quality customers. As a rising star of battery aluminum foil, the company prospectively laid out the battery aluminum foil industry in 2018. At present, the company is producing 40,000 tons of battery aluminum foil and 32000 tons under construction. The company also plans to raise no more than 1.7 billion yuan to build 100000 tons of aluminum foil for power and energy storage batteries. With the landing of 100000 tons of new capacity, we expect the company's battery aluminum foil production capacity to increase from the current 40, 000 tons to 172000 tons. The signing of this cooperation agreement marks the Ningde era's recognition of the quality and production capacity of the company's lithium aluminum foil, and further verifies the company's competitiveness in the field of aluminum foil for new energy vehicle power batteries.
Lithium aluminum foil has a good supply and demand pattern, and sodium ion batteries are expected to provide new demand increments for the industry. In the case of high demand for power batteries in 2022, the company took the lead in putting into production. We expect the company to ship 30,000 tons of aluminum foil batteries this year, ranking among the top three in the industry. On the demand side, due to the use of aluminum foil for both positive and negative electrodes of sodium ion, the demand for aluminum foil of single Gwh is doubled compared with lithium battery. As the sodium ion battery enters the countdown to production, the company is expected to continue to benefit.
Aluminum foil faucet set out again, vertically integrated layout of battery aluminum foil field. The company has ploughed the aluminum foil industry for many years, and has formed an aluminum processing industry chain from aluminum strip (aluminum foil billet) to aluminum foil and then to carbon-coated foil vertically through mergers and acquisitions. 1) Aluminum strip: the company speeds up the distribution of upstream raw materials, invests 1.1922 billion yuan to set up Sichuan Wanshun Zhongji Aluminum Co., Ltd., and plans 130000 tons of aluminum strip project (including 80,000 tons of battery aluminum foil billet) to further reduce costs. 2) Battery Aluminum foil: the company's long-term battery aluminum foil totaled 172000 tons. Customers downstream of battery positive foil include Ningde Times, Ningde Bofa, Duofuo, Xin Wanda, excellent foil talents, Huzhou Tianfeng and so on. 3) carbon-coated aluminum foil: in order to improve the added value of battery aluminum foil, the company acquired Shenzhen Yuqiang in April this year, laying out the field of deep processing of battery aluminum foil. At present, Shenzhen Yuqiang has a production capacity of 3700 tons and has begun to prepare for the construction of a 50, 000-ton project, of which 25000 tons in the first phase is expected to be put into production in 2023.
Functional film industry pioneer, layout composite copper foil has business synergy advantages. 1) the functional film of the company mainly focuses on food and drug packaging, photovoltaic backplane and other high resistance diaphragm fields. The company's high barrier diaphragm material production base was put into production at the end of 2021 and is expected to reach production by 2024. The high-resistance diaphragm production base plans 6 million square meters of high-resistance diaphragm materials for new display components in the optoelectronic field and 1200 tons of high-resistance diaphragm materials for food and pharmaceutical packaging. At present, the high resistance diaphragm developed by the company for portable photovoltaic products has begun to supply downstream photovoltaic panel manufacturers. In addition, in order to meet the packaging material requirements of the global green low-carbon cycle development trend, the company has developed a recyclable single material (PP), cooking-resistant transparent high-resistance diaphragm also began to supply customers. 2) Composite copper foil is in the process of sending samples. Functional thin films need the comprehensive application of advanced technologies such as magnetron sputtering, vacuum evaporation, coating composite, precision cutting and other advanced technologies, and the equipment also needs to be imported from Japan, South Korea, Germany and other countries. The company has a number of magnetron sputtering equipment and electron beam coating equipment and other core equipment. In the manufacturing of composite copper foil, it has the advantages of technology, equipment and business cooperation. At present, samples have been sent to downstream battery enterprises to continuously cooperate with customers to enlarge the coil length for verification.
Profit forecast and investment advice: taking into account the impact of aluminum prices on Q3 performance in 2022 and the volume of carbon-coated aluminum foil in 2024, we estimate that the company's net profit in 2022, 2023, and 2024, respectively, will be 2.31 million, and the corresponding PE will be 3622, 16X in 2022-2024, maintaining the company's "buy" rating.
Risk prompt events: price fluctuation of main products, fluctuation of raw material cost, change of industrial policy, project progress not as expected, the risk of decreasing processing fees caused by increased market competition, and the risk of lagging behind in the use of public information.