Performance review
1Q22 performance is in line with our expectations
The company announced 1Q22 results: revenue 2.558 billion yuan, year-on-year 329.9%, month-on-month 47.2%; return to the mother net profit 213 million yuan, corresponding to 0.44 yuan per share earnings, 252.0% year-on-year, month-on-month 36.0%, in line with expectations. The gross profit margin in the first quarter of 2022 was 26.7%, compared with + 4.5ppt. From a business point of view, the sales volume of 1Q22 lithium iron phosphate / lubricating oil / automotive urea / antifreeze / vehicle maintenance products is + 15% month-on-month, respectively. 6%, 7%, 33%, 5%, and the unit price is + 48%, 8%, 1%, 1%, 1%, 1%, respectively.
Trend of development
Lithium iron phosphate profit improvement, the company's leading technology, capacity expansion continues to benefit. In the first quarter, the company's production and sales of lithium iron phosphate were 225x17,800 tons respectively, with a month-on-month ratio of + 47% to 15%. According to our estimate, the profit per ton further rose to about 14,000 yuan per ton, and about + 24% compared with the previous quarter. It is mainly due to the inventory income caused by the rising price of lithium carbonate and the better profit under the tight supply and demand of lithium iron phosphate. Looking forward, although the epidemic has brought pressure on the manufacturing and sales of downstream new energy vehicles, we believe that demand is expected to be delayed rather than falling in the second half of the year. From the company level, the company's new product conference revealed that the technology of iron lithium No. 1 and lithium manganese iron phosphate has made good progress, and is expected to achieve mass production within a year or two. at the same time, the low temperature performance and energy density of different types of lithium iron phosphate products are better than ordinary products. In terms of production capacity, the company has 162500 tons of new production capacity in Sichuan, Shandong, Hubei and other places this year, and the company has accelerated the construction of matching capacity of iron phosphate between Hubei and Shandong to enhance the degree of integration; customers on the company and Ningde, Ruipu and other in-depth cooperation, while promoting the expansion of overseas customers such as Japan and South Korea, and has entered the stage of sample pilot test, pilot test and small batch orders. We are optimistic that the company's lithium iron phosphate business revenue profit to maintain high growth.
Under the background of six-year promotion and green low-carbon, we are optimistic about the long-term growth of automotive fine chemicals. According to our estimates, the company's profit on automotive fine chemicals increased slightly in the first quarter, which is still subject to high prices such as raw material urea. Looking forward, we are optimistic that with the normal advance of the sixth National Committee, the automotive urea business will continue to grow at a high level, while after the geopolitical factors are gradually eliminated, the prices of raw materials such as urea are expected to fall with the peak of coal, and we are optimistic that the automotive urea business will maintain steady growth. At the same time, the coolant has a broad prospect in new application fields such as new energy vehicles and data centers, and we are optimistic about the medium-and long-term growth of the company's coolant business.
Profit forecast and valuation
Keep profit forecasts for 2022 and 2023 unchanged. The current share price corresponds to a price-to-earnings ratio of 18.7 times 2023 / 16.3 times earnings for 2022 Universe. Maintain an outperform industry rating and a target price of 45.00 yuan, corresponding to 28.9 times 2022 price-to-earnings ratio and 25.1 times 2023 price-to-earnings ratio, which is 54.2% higher than the current stock price.
Risk.
The progress of the lithium iron phosphate project is not as expected, the sales of automotive urea are not as expected, and the business competition is intensified.
