Trade extension chemical industry, dual platform drive. Jiangsu Cathay Pacific, which has been engaged in import and export trade for more than 30 years, is committed to providing one-stop value-added services in the whole supply chain and is a leader in the domestic clothing foreign trade industry. Huarong Chemical was acquired in 2002 and cut into the field of new chemical materials. According to the statistics of Yiwei Economic Research Institute, the company's lithium-ion battery electrolyte shipments are among the top three in China in the last three years.
The demand at home and abroad resonates, and the bibcock starts a large-scale electrolyte production cycle. In 2021, China's new energy vehicles continue to be booming, the European market subsidies do not change the trend of electrification, the US subsidy emission restriction policy is about to come out, and the electrification curtain begins. The global demand for lithium battery electrolyte is expected to increase to 2.13 million tons in 2025, a five-year compound growth rate of 50%. The high prosperity of new energy vehicles promotes the growth of electrolyte demand. On the supply side, the domestic electrolyte supply is strong, the electrolyte faucet starts a large-scale production expansion cycle, the industry concentration continues to increase, and the shortage of supply and demand of lithium hexafluorophosphate in the solute industry is expected to ease in the middle of 2022. Solvent industry big chemical industry enters the bureau or reshapes the market pattern, the additive industry head additive manufacturer and the electrolyte manufacturer unceasingly increases the code to expand production, the supply and demand pattern is good.
Bind high-quality customers and accelerate production capacity expansion. The company has a strong first-mover advantage by signing a long-term strategic cooperation agreement with its core customers. In 2021, the top three customers of H1 are CATL, LG and ATL. The concentration of customer supply is high, and the concentration of the top five customers has reached about 80%. With the continuous expansion of downstream customers, the company's current orders are full. The company has accelerated its capacity expansion and ushered in a high shipping boom.
Layout additives + cultivate a good supply system to establish cost advantages. The electrolyte industry adopts the quotation mechanism of "taking the price of raw materials as the center", and the solute lithium hexafluorophosphate accounts for the largest cost, which is the key factor of pricing. The company binds the solute leader Xintai material, and the long-term supply agreement guarantees the supply of raw materials which are more favorable than the market price. Additives determine the process barriers of the electrolyte, the subsidiary Chaowei new materials to provide additives for the company, and continue to layout new lithium salts. The company has superior profitability and is expected to maintain stable profitability by virtue of the formula advantage.
As a high-quality company in the electrolyte industry, Jiangsu Cathay Pacific has greatly expanded its production capacity to undertake saturated orders.
Years of stable operation has cultivated a good relationship between customers and suppliers to ensure its good profitability. We estimate that the company's revenue from 2022 to 2023 will be 449.34 yuan and 52.869 billion yuan, and the net profit will be 20.21 yuan and 3.171 billion yuan. Cover for the first time, giving a "buy" rating.
Risk tips: Xinneng car sales fall short of expectations; competition in the electrolyte industry intensifies; customer expansion falls short of expectations; the company's capacity release falls short of expectations; profit forecasts fall short of expectations.