The company is a leading enterprise of lithium battery electrolyte solvent. The main products include dimethyl carbonate, propylene carbonate and other carbonate products, as well as lithium hexafluorophosphate, electrolyte additives and MTBE products. According to Gao Gong Lithium, the company's share of the global electrolyte solvent market reached 28% in 2020, and the company's core customers and supplies are mainly concentrated abroad.

With the promotion of the field of new energy vehicles, the demand for lithium-ion battery electrolyte is high. The average annual compound growth rate of lithium ion electrolyte shipments from 2016 to 2021 was as high as 38.53%. Benefiting from the rapid development of the new energy vehicle industry, we estimate that the global sales of new energy vehicles will reach 23.25 million in 2025, and the global battery shipment will reach 1706.3Gwh, thus it is estimated that the global demand for electrolyte will reach 1.911 million tons.

The company has a wide range of products, transformation of electrolyte materials integrated platform service provider. The company maintains the leading position in the electrolyte solvent industry and plans to expand the series of solvent products by nearly one million tons, while actively expanding the field of high-end lithium materials and developing the synergy between products in the industry. The company's 20,000-ton and 30,000-ton silicon-based negative electrode projects are expected to be put into production in 2023 and 2024 respectively, and projects such as positive lithium supplements and wet chemical products are also progressing steadily, constantly enhancing the company's hard strength through the layout of multi-category products, and consolidating the stability of the industrial chain.

The company realizes the integrated industrial chain of electrolyte and realizes self-sufficiency of raw materials. It has opened up the whole industrial chain from propylene carbonate to methyl ethyl carbonate, realized that the upstream and downstream production links are raw materials for each other, reduced the dependence on external raw materials, and had stronger autonomy in the production process and cost control. The company is the only enterprise in the same industry with a self-sufficient supply chain. In 2021, the gross profit margin of the company's dimethyl carbonate series reached 48.87%, higher than that of other enterprises in the same industry.

The company actively promotes production capacity expansion. The company will adopt a multi-base supply model to further promote capacity expansion. By the end of 2022, the company has put into production 440000 tons of new energy materials project and 40,000 tons / year battery grade vinyl carbonate refining project. The company expects to add 100,000 tons / year methyl ethyl carbonate plant project, dimethyl carbonate quality improvement project and lithium electric material production and development integration project in 2023. Relying on the leading advantages of the electrolyte solvent industry, the company has vigorously promoted the electrolyte project since 2021, with a view to improving the integration of the industrial chain. The company estimates that the electrolyte production capacity will reach 300,000 tons / year by the end of 2023. In addition, the company has planned 51000 tons of silicon-based negative electrode project, 20, 000 tons of positive lithium supplement project, 50, 000 tons of wet chemical products project.

Coverage for the first time, giving a "overweight" rating. From 2022 to 2024, we estimate that the company's operating income will be RMB 781,2002,000,000 respectively, a year-on-year growth rate of 11%, 54%, 68%, and a net profit of 11.1%, 1.38 billion, and-6%, respectively, with a year-on-year growth rate of-6%, 17%, 42%, and 5.46, 6.40, respectively. Coverage for the first time, giving a "overweight" rating.

Risk tips: the sales of new energy electric vehicles are not as expected; the competition in the industry is intensified; the production of electrolyte-related products is not as expected; the risk of deviation in the measurement of industry scale; the risk of not updating information data in a timely manner.