Core views:

The company signed a major sales contract for lithium battery equipment. On March 15, 2023, the company announced that it signed a contract with Mianyang Exxon to purchase and sell equipment for the production and sale of lithium batteries. The contract amount is 394.34 million yuan (tax included). It is expected that delivery and acceptance will be completed within this year. The controlling shareholder of Mianyang Exxon is Shenzhen Exxon New Energy, which specializes in R&D, production and sales of new energy lithium-ion batteries and sodium-ion batteries. The signing of this contract will help strengthen the layout and strategic implementation of the company's NEV main waterway business, further expand the company's popularity and influence in the field of battery equipment, and build core advantages.

The company previously signed a “Strategic Cooperation Agreement” with Shenzhen Exxon New Energy on November 10, 2022. According to the contents of the agreement, Shenzhen Exxon New Energy plans to substantially issue the first batch of lithium battery equipment purchase orders of not less than 3 GWh to the company, and in the subsequent 50 GW investment, give priority to purchasing related equipment from the company and affiliated companies under the same conditions as technology and business. The signing of this contract has further promoted the implementation of strategic cooperation between the two sides.

The number of active orders continues to rise, and performance growth can be expected in 2023. According to the performance forecast, in 2022, the company expects to achieve revenue of 1,323 million yuan, a year-on-year increase of 74.56%, achieve net profit of 127 million yuan, a year-on-year increase of 109.36%, after deducting non-return net profit of 79 million yuan, an increase of 155.44% over the previous year, and maintain a rapid growth trend. According to the third quarterly report, as of October 29, 2022, the company's orders for new energy battery equipment were 1,107 billion yuan. In addition to signing a new order of 394 million yuan with Mianyang Exxon, current orders continued to grow.

Profit forecast and investment advice: We expect the company's net profit to reach 243/372 million yuan in 23-24. Refer to comparable companies. Considering the company's high downstream demand and rapid growth in the power exchange business, we gave Hanchuan Intelligence a PE valuation of 35 times the net profit of 2023, corresponding to a reasonable value of 78.51 yuan per share, maintaining a “buy” rating.

Risk warning: R&D and innovation risk; overseas business risk; operating cash flow risk; industrial policy change risk.