Event: the company released its annual report and quarterly report for 2020, with operating income of 416 million, year-on-year-35.55%, return-home net profit of 45 million, year-on-year-26.32%, non-return net profit of 33 million, year-on-year-33.63%. In the first quarter of 2021, the operating income was 156 million yuan, + 179.02% compared with the same period last year, and the net profit was 20 million yuan, + 455.95% over the same period last year.
Comments: 1, 20 years of decline in performance, 20Q1 annual performance increased. The company's revenue and performance declined in 2020, mainly affected by the Q1 epidemic in 2020, and the revenue of the lithium electricity industry declined greatly. The company's Q4 realized a net profit of 5.763 million yuan,-51.77% compared with the same period last year, which was lower than expected.
In 2021, Q1's revenue and return net profit increased significantly compared with Q4 by + 84.31% and + 248.91%, respectively, mainly due to the continuous smooth shipment of downstream customers.
2. The product structure has changed, and the profit margin of Q1 in 2020 has improved compared with the same period last year. The company achieved negative sales of 14500 tons in 2020,-10.56% year-on-year, and the price per ton was 243,000 yuan / ton, down 12,000 yuan / ton from the same period last year. On the one hand, due to the intensification of competition in the negative industry, there is a downstream price reduction.
On the one hand, structural changes have been caused by the fact that the company's natural graphite has become the company's main product. The company's revenue from natural graphite increased from 12% in 2019 to 54% of H1 in 2020. The gross profit margin of 2020Q1's graphite products was 27.1%, an increase of 2.4pct compared with the same period last year.
3. Convertible bond projects will expand production and break through the bottleneck of production capacity. In 2020, the company completed the issuance of convertible bonds, raised 324 million yuan, and steadily promoted the second phase expansion project and the third phase new project of the high-end graphite anode material project. The production equipment has been debugged, and Q1 has released part of its production capacity in 2021. It is expected that the construction will be completed by the end of the year to form an annual production capacity of 30,000 tons, with a total production capacity of 90,000 tons.
4. The industry is booming, and high-quality customers guarantee full orders. The company's current customers include power battery customers such as LG, BYD and Guoxuan Hi-Tech, as well as consumer battery customers such as Penghui Energy, Nandu Power, Ganfeng Lithium and so on. During the year, the company successfully developed Samsung SDI and has entered the stage of small-scale shipping. Stable and high-quality customer resources will enhance the company's technical development strength in silicon-carbon anode and other new materials, and at the same time drive the company's product sales to continue to increase.
Profit forecast and rating: the pattern of the negative material industry is gradually clear, the company embraces high-quality customers, accelerates the volume of products, and gradually increases its share, while maintaining good profitability. We estimate that the company's 2021-2023 net return profit will be 1.25x210x290 million, corresponding to PE of 34.13Universe 20.35tick 14.70, the first time coverage, given a buy rating.
Risk hint: new energy sales fall short of expectations, customer penetration is lower than expected, etc.