Performance summary: the company released the annual report in 2019 and the quarterly report in 2020. The revenue in 2019 was 1.84 billion yuan (- 16.5%), the net profit was 30.43 million yuan (- 42.9%), and the non-net profit was 11.96 million yuan (- 71.9%). The company's previous performance KuaiBao disclosed that the net profit in 2019 was 38.3 million yuan, and the net profit in the annual report was slightly lower than expected. The company's 2020Q1 realized revenue of 270 million yuan (- 30.2%) and net profit of 8.13 million yuan (- 63.5%). The company forecast Q1 return net profit of 50 million yuan to 10 million yuan, in line with expectations.
Revenue fell in 2019, in line with expectations. The company's revenue fell 16.5% in 2019, of which the revenue of cathode materials was 910 million yuan (- 37.8%), mainly due to the sharp decline in the price of raw materials for lithium-ion batteries, and the average selling price dropped sharply compared with the same period last year. Lithium power equipment revenue of 800 million yuan (+ 34.9%), continue to benefit from downstream customer development, maintain high growth. The company's gross profit margin of 16.9% (+ 1.2pp) in 2019 is mainly due to changes in product structure and an increase in the share of revenue from lithium devices with high gross margins. The company's expense rate during 2019 was 15.5% (+ 3.6pp), of which the sales expense rate was 2.6% (+ 0.9pp), the management expense rate was 9.9% (+ 2.5pp, in which the R & D expense rate was increased from 1.3pp to 5.6%), and the financial expense rate was 3% (+ 0.3pp).
2020Q1 was negatively affected by the epidemic, and its performance declined, in line with expectations. According to the China Automotive Power Battery Industry Innovation Alliance, 2020Q1 China's power battery production 8.3GWh, down 58.3% from the same period last year, due to the negative impact of downstream demand, the company's 2020Q1 revenue fell by 30.2%. The company's 2020Q1 gross profit margin is 14.1% (- 2pp), the company's 202Q1 expense rate is 16.8% (+ 1.8pp), of which, the sales expense rate is 1.4% (- 1.5pp), the management expense rate is 11.9% (+ 2.9pp, in which the R & D expense rate is increased from 2.8pp to 7.2%), and the financial expense rate is 3.5% (+ 0.4pp).
Profit forecast and investment advice. The company's lithium equipment and lithium materials two-wheel drive, recognized by mainstream customers, long-term development. It is estimated that in 2020-2022, the EPS of the company will be 0.39, 0.52, 0.78 yuan, respectively, corresponding to PE, which will be multiple of 26-19-13, maintaining a "hold" rating.
Risk tips: (1) the release of capacity is less than expected risk; (2) the risk of policy change of new energy vehicles; (3) the risk of significant fluctuations in cobalt prices.
