Suzhou Huayi, which is a shareholder of the company, plans to invest 1 billion yuan in the 116500 t / an electrolyte and additive project in Dalian Xizhong Island Petrochemical Industrial Park, which will further improve the business layout of Oke and Huayi in the field of lithium battery materials. strengthen the company's competitiveness in the field of lithium battery materials. We believe that the company's lithium battery electrolyte materials business is in line with the national carbon neutralization strategy and is expected to become the company's core growth pole, and the layout of pharmaceutical polyethylene glycol, surfactants and other new businesses are also expected to provide diversified growth space. Maintain the company's 2021-2023 homing net profit forecast of 512x610x764 million yuan, corresponding to the EPS forecast of 0.75pm 0.90max 1.12 yuan, the current stock price corresponding to PE times 14-12-10, maintain the target price of 15 yuan, maintain the "buy" rating.
Suzhou Huayi, an Oak shareholding company, plans to build a 116500 t / an electrolyte and additive project in Dalian.
According to the official website of Dalian Changxing Island Economic Zone, Dalian Huayi, a wholly-owned subsidiary of Suzhou Huayi, in which Oke shares 35%, plans to invest 1 billion yuan to build a 116500 ton / year new energy lithium battery electrolyte and additive project in the Xizhong Island Petrochemical Industrial Park of Changxing Island Economic and technological Development Zone. The project is planned to be built in three phases and is expected to achieve annual production of 116500 tons of electrolytes and additives. Including 60000 tons of chloroethylene carbonate (CEC), 10000 tons of fluoro-ethylene carbonate (FEC), 10000 tons of ethylene carbonate (VC), 6000 tons of 1-line sulfonated lactone (PS), 10000 tons of lithium hexafluorophosphate (LiPF6), 5000 tons of lithium difluorophosphate (LiPO2F2), 12000 tons of potassium fluoride (KF), 3500 tons of lithium fluoride (LiF) and so on.
Suzhou Huayi is expected to enter the lithium battery electrolyte market with this project. Suzhou Huayi headquarters and production base is located in Taicang, Jiangsu Province, mainly engaged in the production of lithium battery additive materials such as vinyl carbonate (VC), fluoroethylene carbonate (FEC), etc., the main products have passed the certification of major downstream manufacturers, and currently have stable and high-quality downstream customers. Huayi Taicang Base has an annual production capacity of about 1000 tons of VC and FEC. At the same time, Suzhou Huayi Reserve has product technologies such as (PS) of 3-propane sulfonate, (CEC) of vinyl carbonate, (VEC) of vinyl carbonate and so on. The Dalian project marks that Huayi will officially enter the market of more lithium battery electrolyte additives and electrolyte materials.
The project is expected to further enhance the competitiveness of Oke and Huayi in the field of lithium battery materials. Oak has gradually transformed into the field of lithium materials since 2014, carried out cooperative research and development with the process Institute of the Chinese Academy of Sciences in 2014, and spent 125 million yuan in 2015 to build a project with an annual production capacity of 20,000 tons of new energy lithium battery electrolyte solvents. On October 28, 2020, the project reached production smoothly. 2021Q1 achieved 5600 tons of EC/DMC products, with an operating rate of 112%, a gross profit of about 32% for the electrolyte materials business, a gross profit of about 11.4 million yuan, and a corresponding price per ton and gross profit of about 6362 yuan and 2036 yuan per ton, which has a significant cost advantage over the current mainstream propylene oxide technology route in the market. At present, the company has realized the batch supply of battery-grade products to the mainstream electrolyte manufacturers, with the expansion of EC/DMC production capacity from 20,000 tons to 30,000 tons in Jiangsu Yangzhou production base, the continuous increase in the proportion of battery-grade shipments and the further improvement of the degree of coordination with Suzhou Huayi business, we expect that electrolyte-related business will become the main driving force of the company's performance growth.
Risk factors: a sharp decline in infrastructure investment; fluctuations in the prices of products and raw materials; new business development is not as expected.
Investment suggestion: Suzhou Huayi, which is a shareholder of the company, plans to invest 1 billion yuan in the 116500 t / an electrolyte and additive project in Dalian Xizhong Island Petrochemical Industrial Park, which will further improve the business layout of Oke and Huayi in the field of lithium battery materials. strengthen the company's competitiveness in the field of lithium battery materials. We believe that the company's lithium battery electrolyte materials business is in line with the national carbon neutralization strategy and is expected to become the company's core growth pole, and the layout of pharmaceutical polyethylene glycol, surfactants and other new businesses are also expected to provide diversified growth space. Maintain the company's 2021-2023 homing net profit forecast of 512x610x764 million yuan, corresponding to the EPS forecast of 0.75pm 0.90max 1.12 yuan, the current share price corresponding to PE times 14-12-10, maintain the target price of 15 yuan, maintain the "buy" rating