Main points of investment:
The performance is in line with expectations, maintaining the "overweight" rating and maintaining the target price of 12.60 yuan. The company's revenue in 2019 was 1.21 billion, year-on-year + 12.14%, and its net profit was 68 million yuan,-3.88% year-on-year, in line with expectations. The increase in revenue mainly comes from battery materials (989 million yuan, + 19.34% compared with the same period last year); the decline in net profit is mainly due to the increase in sales and financial expenses, which is expected to decrease significantly in 2020. The revenue from 2020 to 2021 is estimated to be 16.90 and 3.442 billion, respectively, and the net profit is 1.54,331 million, corresponding to 0.28,0.60 yuan for EPS. The new profit forecast for 2022 shows that the revenue and net profit for return to the mother are 45.90,431 million yuan, corresponding to 0.78 yuan for EPS.
Maintain the target price of 12.60 yuan, corresponding to 45 times PE in 2020, and maintain the "overweight" rating.
Electrolytic manganese dioxide faucet, vigorously layout of new energy cathode materials. The company is the leader of the electrolytic manganese dioxide industry and is now making great efforts to distribute the new energy field. Hunan Yuneng, which is the core supplier of LFP in China, is expected to share about 30% in Ningde era and is the largest external supplier of BYD. Yuneng plans to expand production of 20,000 tons of LFP again in March 2020 and is expected to start production in the second half of 2020. The business cycle of the industry superimposes the company's capacity expansion, and the performance is about to enter an explosive period.
The blade battery is officially commercial, and the lithium iron phosphate cathode material opens the growth ceiling. BYD released its new car on April 20, and the EV version was assembled with a "blade battery" for the first time, while its latest meeting said that European and Japanese car companies also modify strategies according to the blade battery; at the same time, BYD will gradually adopt blade battery (mainly the initial LFP) in the next three years, and the blade battery will once again open the growth ceiling of lithium iron phosphate power battery cathode material.
Catalysts: "blade batteries", cobalt-free batteries on the market, subsidies for new energy vehicles.
Risk hint: car sales fall short of expectations and upstream raw material prices fluctuate.