Incidents:
The company recently issued an announcement on the development of an action plan to double improve quality and return and the progress of the repurchase of the company's shares. In order to enhance investor confidence and promote the long-term health and sustainable development of the company, the company's action plan for improving quality and return gathers the main business to drive high-quality development through innovation; at the same time, implementing a global layout to further enhance the company's global market share; focusing on investor returns. As of February 26, 24, the company had paid back a total of 1,325 billion yuan in cash dividends. As of February 29, the company had repurchased 510,000 shares through centralized bidding transactions, accounting for 0.05% of the company's total share capital.
Reduce prices and maintain volume to increase market share, and the leading position is stable
In the first half of '23, the company shipped 2.5 billion square meters of diaphragms, +11.1% year-on-year, with a market share of 34.7%, ranking first. In order to increase market share, the company took the initiative to reduce prices in '23, and membrane product revenue in the first half of '23 was -5.28% year-on-year. The company's original online coating technology can effectively reduce product costs, and 24 more years of online coating production line installation will bring the company a cost advantage. The company's dry process products have begun to be supplied in batches, and the main advantage is technical advantage. The company's customers include mainstream domestic and foreign lithium battery companies such as Ningde Times, BYD, Panasonic, Samsung, and LGES, and their high-quality orders are stable.
Actively lay out overseas markets, and demand from Europe and the US continues to be released
The company actively promoted the construction of overseas production lines. In July '23, the company's first overseas lithium battery separator production base in Hungary was put into operation, with a total production capacity of over 400 million square meters; in August '23, the Hungarian factory signed an agreement with the world's largest lithium battery manufacturers to supply no less than 960 million square meters of lithium battery separators in 2025-2033; in January '24, the company adjusted the investment in the US lithium battery separator project to US$276 million, with a planned total production capacity of 700 million square meters. As overseas delivery capacity continues to improve, the company's profitability is expected to further increase.
New diaphragm products launched to help the company usher in new opportunities
In January '24, the company successfully developed a new type of diaphragm product - a semi-solid electrolyte composite membrane. This product is widely used in batteries in the fields of new energy vehicles, 3C, energy storage, etc. Compared with conventional diaphragm products, its discharge performance is outstanding in a low temperature environment. In particular, in an ultra-low temperature environment of -30℃, it can increase the discharge capacity retention rate of the finished battery by more than 10% over the same period last year. This breakthrough provided an opportunity for the company to explore new markets and new application scenarios.
Profit Forecasts, Valuations, and Ratings
We expect the company's revenue for 2023-25 to be 132.776/152.55/ 17.907 billion yuan, respectively, with corresponding growth rates of 5.44%/14.91%/17.38%; net profit to mother of 31.21/35.52/4.211 billion, respectively, corresponding growth rates of -21.99%/13.81%/18.57%, EPS 3.19/3.63/4.31 yuan/share, and PE 13/12/10 times, respectively. Referring to the relative valuation results of comparable companies, we gave the company 18 times PE in 24 years, with a target price of 65.34 yuan, maintaining a “buy” rating.
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