Event: the company announced on October 11, 2022 that the company and Dalian Rongke Energy Storage Group Co., Ltd. recently signed a joint venture agreement in Panzhihua City, Sichuan Province, deciding to jointly invest 31.61 million yuan to set up a joint venture company. among them, the company accounts for 51% of the registered capital, and Dalian Rongke accounts for 49% of the registered capital.
Comments:
Joint venture to build 62000 cubic meters of vanadium battery electrolyte per year. The main business of the joint venture company will cover the research and development, processing, production, sales and leasing of all-vanadium flow battery electrolyte technology. The joint venture company will build an electrolyte production line with a capacity of 2000 cubic meters per year in Panzhihua City in 2022, which is the first stage; from 2023 to 2024, according to the growth of the vanadium battery energy storage market, it is negotiated to invest in the construction of 60000 cubic meters / year vanadium electrolyte, this is the second stage. Per cubic meter electrolyte contains about 0.16 tons of vanadium pentoxide (medium nuclear titanium dioxide investor Q & A), 62000 cubic meters of discounted vanadium pentoxide about 9920 tons of vanadium pentoxide.
The cost of electrolyte accounts for more than 50%, and the importance of vanadium raw materials is highlighted. The all-vanadium flow battery mainly includes three parts: electrolyte, stack and electronic control system. The electrolyte cost accounts for 50% of the 4-hour energy storage system, and the longer the charge and discharge time is, the higher the electrolyte cost is. Therefore, the advantage of enterprises with upstream raw materials will be more significant; vanadium titanium shares have the largest production capacity of vanadium products in the world, with a discount of 40,000 tons of vanadium pentoxide per year. At the same time, the company announced earlier that the project includes "Vanadium Battery electrolyte industrialization Automation and Application Research and Development Project", which is planned to reduce the intermediate links in the production process and reduce the energy storage cost of vanadium battery through technical research.
A number of all-vanadium flow battery projects accelerated landing. The first phase of 100MW/400MWh, the first national all-vanadium flow battery demonstration project undertaken by Dalian Rongke, has entered the final stage of grid connection and will be officially put into use in mid-October. Since September, the construction of all-vanadium flow battery project has shown an accelerated development trend. 1) on September 17, CNNRC Huineng released the tender project of 1GWh all-vanadium flow battery; 2) on October 1, the centralized start ceremony of the 1 million kW photovoltaic + 250 kW / 1 million-hour all-vanadium flow energy storage project in Jimusar County, Xinjiang, was built by Xinjiang Branch of three Gorges Energy.
Profit forecast, valuation and rating: we believe that all-vanadium flow batteries have high safety and long cycle life, and will have a bright future in the field of long-term energy storage in the future. Benefiting from the development of all-vanadium flow batteries, the value of the company's vanadium products is expected to be revalued. Regardless of the contribution of new business to the company's performance, and maintain the previous profit forecast, it is estimated that the net profit from 2022 to 2024 will be 19.22.5 billion yuan, an increase of 45%, 17% and 13% over the same period last year. The PE corresponding to the current stock price is 21-18-16, respectively, and the "overweight" rating is maintained.
Risk hint: the price of vanadium, titanium and other products has fallen sharply; the progress of the electrolyte cooperation project is not as good as expected.
