The company is the world's largest manufacturer of commercial pre-baked anodes, and is expected to reach 5 million tons of contracted production capacity in 2025. As of December 31, 2022, the company's pre-baked anode production capacity was 2.82 million tons. In line with the industry's “North Aluminum moving southward” trend, the company continued to advance its strategic layout in the four regions of Northwest China, Southwest China, Shandong, and overseas, aiming to achieve an average annual production capacity of 600,000 tons of pre-baked anodes during the 14th Five-Year Plan period. At the end of the 14th Five-Year Plan period, the company signed a production capacity of about 5 million tons of pre-baked anodes.
Large-scale procurement of raw materials, comprehensive utilization of resources and low financing costs bring cost advantages to the company.
In 2022, the company's pre-baked anode production cost was about 789 yuan/ton lower than the industry average. There are three main factors: 1) large-scale procurement of raw materials, due to the company's large pre-baked anode production capacity, the current annual petroleum coke purchase volume and trade volume has reached more than 4 million tons, so the raw materials side has strong bargaining power; 2) Comprehensive utilization of resources, the waste heat generated during the petroleum coke calcination process is greatly reduced. In 2022, the company's waste heat generation capacity is about 20,000 megawatt-hours, accounting for 835.2% of total electricity consumption; 3), low financing costs The company as an industry It is the only listed company in China. The financing channels are more diverse, and the financing costs are more competitive. Furthermore, as a leading company in the industry, bank loan interest rates are extremely advantageous.
Take advantage of the new energy Dongfeng and enter anode materials to create a second growth curve. The company's self-building+acquisition of both lines are parallel, and the integrated anode production capacity will reach 315,000 tons after all are completed. 1) Self-built project. In April 2022, the company announced that it will invest in the construction of an integrated lithium-ion battery anode material project with an annual output of 200,000 tons. Currently, the graphite chemical process for the project has been completed and put into operation. Meanwhile, on August 31, 2023, the company announced that it will begin planning to invest in the second phase of the 50,000 ton project; 2) The acquisition project. The company has successfully acquired Xinyuan shares, and currently has the entire lithium battery anode material industry chain with an annual production capacity of 15,000 tons and a 40,000 ton graphitization project.
Profit forecast and investment advice: We expect the company's net profit to be -5.98/8.84/999 million yuan in 2023-2025, respectively, and the corresponding EPS is -1.11/1.63/1.83 yuan/share. Using the segmented valuation method, the company's pre-baked anode and anode material sectors were given 12.4 times and 9.7 times PE in 24 years according to the average of comparable companies. The corresponding market capitalization was 99 billion yuan and 800 million yuan respectively, with a total market value of 10.7 billion yuan, corresponding to a target price of 19.87 yuan. The first coverage gave the company a “buy” rating.
Risk warning: the price of pre-baked anodes continues to decline, production capacity releases fall short of expectations, global NEV sales fall short of expectations, and the risk of fluctuating materials and energy prices