Key points of investment
Next Tuesday (March 19), there will be an inquiry for a new GEM stock “Zhongrui Shares”.
Zhongrui Co., Ltd. (301587.SZ): The company is engaged in R&D, manufacturing and sales of precision structural parts for cylindrical lithium batteries. The main products include power type and capacity lithium battery combination cap series. In 2021-2023, the company achieved revenue of 648 million yuan/764 million yuan/687 million yuan respectively; YOY was 40.81%/17.92%/-10.07%, and the three-year compound annual growth rate of operating income was 14.30%; net profit to mother was 137 million yuan/184 million yuan/136 million yuan, YOY was 108.17%/34.26%/-25.91%, and the three-year compound annual growth rate of net profit to mother was 27.46%. According to preliminary management estimates, the company's net profit attributable to shareholders of the parent company in 2024Q1 is expected to be 33.6 million yuan to 37.9 million yuan, an increase of 0.61% to 13.48% over the same period last year.
Investment highlights: 1. The company focuses on the cylindrical lithium battery cap segment, and ranks first in the country and the leading position in the world in this product; by serving LG New Energy, the company has achieved a large supply of Tesla's new energy vehicle portfolio caps. Cylindrical lithium battery caps are the company's core main product, and the corresponding revenue accounted for more than 90% of total revenue during the reporting period. According to statistics from the China Chemical and Physical Power Industry Association, the company's cylindrical lithium battery cap products ranked first in the country in terms of market share in 2019 and 2020. According to data from the Starting Point Research Institute, the company's combined cap product sales in 2021 and 2022 accounted for 15.33% and 15.75% of global cylindrical lithium battery shipments, respectively, and have a leading competitive position in the market. Over the years, the company has established a long-term and stable cooperative relationship with LG New Energy. During the reporting period, LG New Energy was the company's largest customer; through cylindrical lithium batteries supporting LG New Energy, the company's products were finally used in Tesla New Energy's new energy vehicles and became the only domestic supplier of LG New Energy's portfolio cover for Tesla projects. During the reporting period, the company's sales volume of this model product accounted for more than 50% of LG New Energy's production capacity requirements. 2. Many domestic and foreign manufacturers are steadily advancing the construction of 4680 large cylindrical lithium batteries. The company has cooperated with customers to develop 4680 battery structural parts and achieve small-batch supply. It is currently one of the few enterprises in the world with the production capacity of 4680 structural components. Currently, many domestic and foreign manufacturers, including LG New Energy, Panasonic, Samsung SDI, Ningde Times, and BAK Battery, are steadily advancing technology research and production line construction for 4680 large cylindrical lithium batteries. The company cooperated with well-known international customers to achieve small-batch production and supply of 4680 structural parts in the second half of 2022. It is one of the few international companies with 4680 structural parts production capacity; in addition, the company is also simultaneously developing 4680 battery structural parts in other categories other than caps. 3. The important new cylindrical lithium battery steel shell products developed by the company are about to enter mass production, which is expected to provide customers with richer solutions for lithium battery safety structures. The steel case and composite cap are also one of the important safety structural components of lithium batteries, which are related to the safety and stability of lithium batteries; the company achieved a technological breakthrough in mirror stretch pre-plated steel shells for lithium batteries through joint development with ISIS Co., Ltd., and further broadened the company's structural parts product line. Considering that lithium battery pre-plated nickel steel shell technology is not mature in China, ISIS has accumulated many years of experience in ultra-precision drawing machines and molds, and has leading technical strength, providing strong technical support for the company's new product development. At present, steel shell products have been tested in small batches, and it is expected to enter the mass production stage as construction of the fund-raising project is about to be completed; according to the company's prospectus and response to the review inquiry letter, the company's fund-raising project has planned an annual production capacity of 312 million cylindrical lithium battery steel cases, and as of the date the inquiry letter was issued, the construction progress of the fund-raising project production workshop had reached more than 90%, and the project is expected to reach production in 2025.
Comparison of listed companies in the same industry: The company is mainly engaged in R&D, production and sales of precision structural parts for cylindrical lithium batteries, and selected A-share listed companies Kodali, Zhenyu Technology, and Jinyang Co., Ltd., which have similar main business to the company, as comparable companies for Guanghe Technology. Looking at the comparable companies mentioned above, the average revenue scale (TTM) of the industry is 5.860 billion yuan, the comparable PE-TTM (excluding outliers and arithmetic average) is 27.93X, and the gross sales margin is 17.13%; in comparison, the company's revenue scale is lower than the industry average, but the gross sales margin is higher than the industry average.
Risk warning: There is still a possibility that companies that have begun the inquiry process cannot go public due to special reasons, company content is mainly based on prospectus and other public information, there is a risk that the selection of listed companies in the same industry is not accurate, there may be interpretation biases in the interception of content data, etc.