Event description
On the evening of August 30, the company released its semi-annual report of 2022. During the reporting period, the company achieved operating income of 3.478 billion yuan, a decrease of 4.62% over the same period last year, and a net profit of 651 million yuan, an increase of 10.15% over the same period last year.
The production and marketing of electrolyte solvents increased steadily, and the profitability was under pressure due to the rise in the price of raw materials. The company realized operating income of 3.478 billion yuan, down 4.62% from the same period last year; realized net profit of 651 million yuan, an increase of 10.15% over the same period last year; and realized net profit of 638 million yuan, up 8.36% from the same period last year. The company's revenue decreased slightly compared with the same period last year, mainly due to a decline in sales of methyl tert-butyl ether and gas. According to the operating data disclosed by the company, the company's sales of methyl tert-butyl ether and gas in the first half of 2022 were 81000 tons and 38800 tons respectively, down 62.90% and 39.28% from the same period last year. However, due to the increase in the price of the company's corresponding products, the production and sales of superimposed electrolyte solvent products increased steadily, and the company's revenue decreased only slightly. From the profit side, the company in the case of a slight reduction in revenue, profits have achieved positive growth, reflecting the company's strong ability of cost control. In the second quarter alone, the company achieved an operating income of 1.707 billion yuan, a decrease of 14.74% compared with the previous quarter, a net profit of 201 million yuan, a decrease of 54.00%, and a non-homed net profit of 192 million yuan, a decrease of 54.00%.
The company's revenue declined in the second quarter compared with the previous quarter, mainly due to the fact that the price of the company's main product electrolyte solvent was affected by the epidemic in the second quarter. According to iFinD data, the average ex-factory price of the company's DMC in the first quarter of 2022 was 7995 yuan / ton, while the average ex-factory price in the second quarter was only 5818 yuan / ton, a decrease of 27.23% compared with the previous quarter. From the profit side, due to the high price of raw materials in the second quarter, the cost side rose rapidly.
With the further expansion of the territory of lithium materials and the gradual release of new production capacity to boost the company's performance, the company is the leader of domestic electrolyte solvents, covering a full range of products such as dimethyl carbonate, diethyl carbonate, methyl ethyl carbonate, vinyl carbonate and so on. Market share is far ahead. At present, the company has a production capacity of 150,000 tons of dimethyl carbonate per year, and at the same time, the 440,000 tons / year new energy material project (phase I) built by the company has been successfully put into operation, which indicates that the production capacity of dimethyl carbonate has reached 250,000 tons / year. Large-scale production will bring greater cost advantages for the company. At the same time, the 40,000 t / a battery grade ethylene carbonate refining project invested by the company's holding subsidiary Shi Da Shenghua (Quanzhou) Co., Ltd. has been successfully put into operation, and the battery grade ethylene carbonate products have been produced and entered the normal production stage. This shows that the company is carrying out product upgrading, the optimized industrial structure will further improve the company's competitiveness, and the battery-grade products with higher gross profit margin will also greatly increase the company's profits and consolidate the company's leading position. Moreover, the company further broadens the business territory, extends the development of lithium materials projects, Meishan base layout of 30,000 tons / year silicon-based negative electrode, 20,000 tons / year lithium supplement, 10,000 tons / year new conductive agent and other projects, with the continuous completion and production of the above projects, will further boost the company's performance.
Sign the contract of electrolyte foundry, accelerate the release of production capacity.
Relying on its advantages in electrolyte solvents, the company actively arranges downstream electrolytes. At present, the planned and under construction of electrolytes can reach 700000 tons. Among them, the wholly-owned subsidiary Shenghua New Energy Technology (Dongying) Co., Ltd. invested in the construction of 300,000 tons / year electrolyte project, which is expected to be completed and put into production in February 2023. Wholly-owned subsidiary Shenghua New Energy Technology (Wuhan) Co., Ltd. plans to invest in the construction of 200000 tons / year electrolyte and supporting public works project, which is expected to be completed and put into production by the end of 2023. Wholly-owned subsidiary Shenghua New Energy Technology (Meishan) Co., Ltd. plans to invest 200,000 tons / year of electrolyte and supporting project, which is expected to be put into production in December 2023. The company cut into the electrolyte race track, not only because of the leading position of electrolyte solvents, but also because the company can produce all kinds of raw materials for electrolyte, including solute lithium hexafluorophosphate and various additives. This enables the company to produce electrolytes at a lower cost and enhance the core competitiveness of its products. At the same time, the company signed an electrolyte foundry agreement with ENCHEM CO.,LTD, marking the smooth opening of the market for the company's electrolyte products, and the release of production capacity is expected to be accelerated.
Investment suggestion
Considering the increasing richness of the company's lithium product matrix and the fast pace of capacity release, the company is expected to achieve operating income of 76.81,97.25 and 21.248 billion yuan respectively from 2022 to 2024, with a net profit of 13.66,18.80 and 2.381 billion yuan, corresponding to PE of 24,18 and 14 times, respectively. Maintain the company's "buy" rating.
Risk hint
(1) the rise in the price of raw materials leads to an increase in costs.
(2) the progress of customer verification is not as expected
(3) the progress of capacity release is not as expected.
(4) the downstream demand is lower than expected.