The company released the 2019 performance report. According to the company's performance report, net profit in 2019 was about 21.999 million yuan, a year-on-year decrease of 90%, and net profit of about 34.66 million yuan was achieved in the 2019Q4 quarter, an increase of 349% over the previous year. This performance report is basically in line with previous performance forecasts. It is optimistic that cobalt prices will continue to pick up, and the company's performance is expected to rise steadily. Since 2019Q3, both domestic and foreign cobalt prices have clearly picked up. Since 2019Q2, the company's single-quarter results have continuously recorded positive values, and performance has become more stable. Furthermore, given the tightening supply side brought about by Mutanda's discontinuation of production and the continued recovery of 3C lithium batteries and power lithium batteries, we are optimistic about the subsequent rise in cobalt prices, and the company's performance is expected to improve further. The company announced a plan for the non-public offering of shares and plans to continue to increase the NEV materials business. Recently, the company issued a fixed increase plan, stating that the total amount of capital it plans to raise is no more than 1.72 billion yuan for the “power battery cathode material precursor project with an annual output of 30,000 tons”, “an annual output of 100 tons of highly conductive graphene”, “a carbon nanotube production project with an annual output of 150 tons”, “a project with an annual output of 5,000 tons of cobalt intermediates (metal volume), 10,000 tons of cathode copper”, and “bank loan repayment and supplementary liquidity projects”. From integration to progress, the NEV materials business is expected to blossom a lot. First, our own production capacity is rapidly expanding. The company has integrated leading assets in the field of key materials for new energy vehicles. The company announced that it plans to achieve 100,000 tons of ternary precursors and 20,000 tons of cobalt salt in the next 3 years. The production capacity of new conductive agents will expand from the current 10,000 tons to 20,000 tons, and the production capacity of crude cobalt and cathode copper at the raw material end is also planned to double. Second, the popularity of the NEV industry has increased. The impact of declining domestic NEV subsidies is gradually being digested, growth in overseas markets is accelerating, cheap and popular models are appearing frequently, and the electric vehicle market is transitioning to a growth period. The supply advantages and synergies of the company's entire industry chain are expected to be further exploited. Third, the relaxation of refinancing is beneficial to the expansion of companies' production capacity and further integration of resources. On the one hand, the expansion of a company's production capacity requires objective capital. On the other hand, considering the company's strong ability to integrate in the field of new materials in the past, the relaxation of refinancing has also provided better financing conditions for the company to further integrate high-quality assets. Investment advice: Continue to be optimistic about the revaluation of the company's core materials for new energy vehicles, maintain the “buy-A” rating, and give a target price of 18 yuan for 6 months. The company has strong industrial integration and incubation capabilities for the core materials industry for new energy vehicles. Businesses such as carbon nanotube conductive agents and cobalt (raw materials - cobalt salts - precursors) are all well-deserved leading suppliers in the industry, with a high position in the industry and remarkable growth. The current valuation is low compared to comparable companies, and there is strong potential for revaluation. We expect net profit from 2019 to 2021 to be 0.2 million yuan, 280 million yuan, and 390 million yuan respectively, giving a “buy-A” rating. The target price for 6 months is 18 yuan, which is equivalent to the dynamic price-earnings ratio of 29x in 2020. Risk warning: 1) Production and sales of conductive agents fell short of expectations; 2) the release of precursor production capacity fell short of expectations; 3) production and sales of new energy vehicles fell short of expectations; 4) the decline in cobalt prices exceeded expectations.