The layout of the two main businesses has been gradually improved, and a new energy materials platform-based enterprise has been built. The company is positioned as a new material platform-based enterprise, mainly engaged in R&D, production and sales of new energy battery materials and inorganic non-metallic glazed materials. According to the company's 2020 semi-annual report data, 2020H1 achieved revenue of 1,178 million yuan, a year-on-year decrease of 29.73%; it achieved net profit of 25 million yuan to its mother, an increase of 139.36% over the previous year. As downstream demand gradually stabilizes, the company's business is expected to reach an inflection point in performance in the second half of the year.
Improve the layout of new energy materials and seize opportunities during the period when demand for new energy is growing rapidly. After listing, the company continued to expand its new energy business based on its position as a new materials platform. Through the acquisition of Qingdao Haoxin and Jiana Energy, the company quickly entered the field of new energy materials, forming an upstream and downstream integrated layout from upstream cobalt and lithium resources to power battery-grade lithium carbonates, cobalt salts, ternary carbon drivers, and graphene/carbon nanotube conductors. It is a domestic supplier that can provide comprehensive solutions for battery companies in China.
A large number of slate production lines have been put into operation, bringing new demand to the ceramic ink industry. Rock slabs are an emerging stone material. The epidemic has prompted users' requirements for the living environment to begin to change, and green building materials are in demand.
According to data from the “2020 China Rock Board High-End Customized Internet User Behavior Report”, from January to May 2020, searches for large slates+slate surged by 241.3%. Among them, ceramic slate increased by 292.5% and became a hot topic of attention. According to incomplete statistics from “Taocheng Daily”, as of July 2020, more than 45 slate production lines have been built in China, and a large number of slate production lines have been put into operation, bringing new demand to the ceramic ink industry.
Profit forecasts and investment recommendations. Without considering fixed growth factors, we expect net profit to be 1.48, 2.57, and 299 million yuan from 20 to 22, and earnings per share of 0.32, 0.56, and 0.65 yuan per share. The price-earnings ratio corresponding to the current stock price is 44, 26, and 22 times. Referring to comparable public valuation levels, comprehensively considering the company's business structure and performance growth rate, the company was given a PE valuation of 40 times in 2021. The reasonable value of the corresponding company was 22.4 yuan/share, maintaining the “buy” rating.
Risk warning. Upstream raw materials fluctuated greatly; progress in new business fell short of expectations; progress of projects under construction fell short of expectations; major environmental protection and production safety incidents.