Matters:

On December 10, Ningde Times issued a special dividend announcement. The company plans to pay a special dividend of 15% (about 5.4 billion yuan) of the 36 billion yuan net profit for the first three quarters of 2024, with a cash dividend of 12.30 yuan (tax included) for every 10 shares. The total dividend accounts for about 4.6% of the undistributed profit.

On December 10, Ningde Times reached a cooperation agreement with Stellantis. Both parties hold 50% of the shares and plan to build a power battery factory with an annual production capacity of 50 GWH in Spain. The total investment scale is estimated to be 4.038 billion euros, and the construction period is 4 years.

Comments:

Increase shareholder returns and demonstrate financial soundness. In the 2023 dividend plan, the dividend ratio is 50% of net profit, with a total cash payment of about 22.06 billion yuan, which was implemented in April 2024. In addition to this special dividend, the cumulative dividend amount since the listing of the Ningde Era has reached 36.561 billion yuan, and the average dividend rate is 26.06%. It is at a high level in the industry. The dividend strength is remarkable, showing that the company attaches importance to shareholder returns. At the same time, the current dividend amount accounts for 4.6% of undistributed profits, which will not affect the company's liquidity pressure and enhance investor and market confidence.

Deepen the international layout and consolidate the position in the global market. The company signed a joint venture agreement with a subsidiary of Stellantis to jointly establish a joint venture in Spain. The company will invest 1.211 billion euros (50%) in Luxembourg through CATL; Stellantis will invest 0.969 billion euros (40%) and 0.242 billion euros (10%) through its two subsidiaries STLA Spain and STLA France, respectively. It is proposed to build a new battery factory with a total investment of 4.038 billion euros, with an annual output of 50 GWh.

Controlling management strengthens strategic leadership. Despite the same shareholding ratio, the joint venture is owned by Ningde Times, and Ningde Times has the right to appoint a chairman of the board of directors and a CEO. Ensuring that the Ningde Era dominates the operation and strategic direction of the joint venture has also provided strong support for the company's technological output and brand influence in global expansion. It is expected to further enhance the company's competitiveness in the European battery market and lay the foundation for future supply chain optimization and market expansion.

Investment advice: Considering the company's advantages as a leader in the battery industry, continuing to lead the world in market share and sales volume, high customer stickiness and strong supply chain resilience, we expect the company's 2024-2026 net profit to be 51.823/64.215/78.252 billion yuan, respectively, and the current market value corresponding to PE is 21/17/14 times, respectively. Referring to comparable company estimates, 22x PE in 2025 was given, and the corresponding target price was 320.90 yuan, maintaining a “strong push” rating.

Risk warning: NEV market demand falls short of expectations, market competition intensifies, raw material supply and price fluctuations, technical route substitution, etc.