Our point of view: Tianneng Power is firmly in the lead of lead-acid battery, and its performance is basically solid; energy storage adopts the lead-lithium dual technology route, which is expected to increase the performance; in addition, the company lays out lead-lithium recycling, hydrogen fuel cell, sodium ion battery, long-term space up. As of June 30, 2023, the company's PE (TTM) is 4.5X and MRQ is 0.56X. Investors are advised to pay attention to it.
General situation: Tianneng Power was founded in 1986, listed on the Hong Kong main board in 2007, and Tianneng shares, a holding subsidiary, was listed on the Shanghai Stock Exchange Kechuang Board in 2021 (Tianneng Power is different from Tianneng shares in listing subjects, accounting standards, etc.). The data in this report shall prevail on Tianneng Power. The company's cornerstone business, lead battery, occupies the leading position in the industry, and there are lithium ion, hydrogen fuel, sodium ion battery technology routes, covering power, energy storage and recycling business, and the network layout of 16 bases in 7 provinces and more than 400,000 terminal stores across the country. in addition, the company has lead and other trading business. In 2022, the income from trading business and manufacturing business accounted for 43.74% and 56.26% respectively; within the manufacturing business, lead battery, new energy battery (lithium electricity, hydrogen fuel cell, etc.) and recycling business income accounted for 85.17%, 3.97% and 9.09% respectively. The volume of trading business is large and profitable, and lead battery is the core of the company's profits.
Lead storage power faucet: the company's lead storage battery is mainly lead storage battery, and there are start-up and stop battery, lead-carbon energy storage battery and so on.
In 2022, the company's lead battery revenue was + 12.3% to 35.747 billion yuan from the same period last year, of which sales volume was + 8.3% to 100.3GWh, and the unit price was + 3.8% to 0.36 yuan / Wh;. Among them, the lead storage battery revenue was + 12.3% to 35.109 billion yuan, making it the leading battery. The company 2021Q4 began to adjust the lead battery pricing strategy, not only according to the lead price, but also sulfuric acid, plastic shell and other auxiliary materials into the pricing mechanism, smooth transmission of the impact of raw material price fluctuations; at the same time, strengthen cost control and increase gross profit margin in 2022.
Energy storage products are expected to release: the company currently adopts the lead-lithium dual technology route. In terms of lead-carbon energy storage, the company's revenue in 2022 was + 225.1% to 128 million yuan compared with the same period last year. In December 2022, Tianneng and Taihu Nenggu signed a lead-carbon battery procurement agreement, which is not less than 30GWh in three years, which is expected to lead to a substantial release of lead-carbon batteries. In terms of lithium energy storage, the company's revenue in 2022 was + 353.5% to 524 million yuan compared with the same period last year; the company launched 180Ah and 280Ah energy storage cells, air-cooled, liquid-cooled and other energy storage modules, and released TN200 liquid-cooled energy storage cabinets.
Layout of hydrogen fuel cell, sodium electricity: hydrogen fuel cell, the company achieved revenue of 63.39 million yuan in 2022, and made progress in stack, membrane electrode, bipolar plate, engine system, etc. Shuyang base, which has an annual production capacity of 3000 fuel cell systems and components, was completed at the end of 2022 and is expected to be put into production in 2023. In terms of sodium ion batteries, the company completed the 300MW sodium electricity pilot production line in 2022, and the number of cell cycles exceeded 2000.
Promote recycling business: in 2022, the company's external sales revenue from recycling business was + 42.4% to 3.814 billion yuan, of which lead battery and lithium-ion battery recycling income was 3.084 billion yuan and 678 million yuan respectively, + 34.2% and + 99.9% respectively compared with the same period last year. The company has the qualification of double whitelist for recycling and echelon utilization; it has established a mature lead recovery system with more than 600 recycling outlets in 15 provinces across the country; and actively deploy lithium recovery channels to promote strategic cooperation among new energy vehicle operators. At the end of 2022, the annual recovery and disposal capacity of lead battery and lithium-ion battery is 1 million and 10,000 tons respectively, the recovery rate of lead, plastic shell and sulfuric acid is more than 99%, and the recovery rate of lithium is more than 88%. The total capacity of lithium battery disposal will rise to 110000 tons / year after completion of the coastal base in Jiangsu.
Performance tracking: in 2022, the company's revenue was 74.599 billion yuan,-12.9% year-on-year, mainly due to the contraction of trade business with low gross profit margin; in the same period, manufacturing revenue was 41.971 billion yuan, + 10.7% year-on-year. In 2022, the company's gross profit and return net profit were 63.89 yuan and 1.796 billion yuan respectively, which were + 38.3% and + 38.2% respectively compared with the same period last year; gross profit margin and return net profit margin were 8.56% and 2.41% respectively, which were + 3.17% and + 0.89pcts respectively compared with the same period last year.
Risk tips: raw material costs and product prices fluctuate, company capacity expansion is not as expected, industry overcapacity