Based on the technical accumulation in the field of fluorine-containing fine chemicals, the layout of lithium materials. The company is deeply engaged in the business of fluorine-containing fine chemicals, including pharmaceuticals and pesticide intermediates. Master a number of core technologies, including directional introduction of fluorine atoms, chiral enzyme catalytic reaction and so on. With the help of high-quality products and R & D capabilities, the company has become a long-term supplier to Germany's Merck, BASF, Bayer, Sumitomo, Syngenta and other enterprises, and has a strong competitiveness in the field of fluorine chemical polymerization production. In the fluorine chemical industry chain, fluorine-containing fine chemicals belong to the highest category of added value, and have higher requirements for technology and management. Based on the background and accumulation of fluorine chemical polymerization production in the field of fluorine-containing fine chemicals, the company distributes lithium electric materials (mainly fluorine compounds) and rushes to the commanding heights of lithium battery electrolyte materials.

The new energy car scene demeanor exceeded expectations, and the purification technology helped the company's production capacity fall to the ground quickly. In 2021, the prosperity of new energy vehicles in China continues to rise, and the China Automobile Association predicts that shipments of new energy vehicles in China will reach 2.4 million in 2021. Driven by demand, lithium materials such as LiPF6 and additive VC are much more prosperous than expected. According to Baichuan Yingfu, the price of LiPF6 has risen to 385000 / ton, an increase of 431.03% over the same period last year, industry inventory has dropped by 71.63% compared with the same period last year, and lithium electricity, additives and other materials in the electrolyte link are in short supply. At present, the company has a production capacity of 2000 tons of LiPF6 and 500tons of LiFSI, which is under construction, including 6000 tons of electrolyte LiPF6, 1500 tons of LiFSI, and 5000 tons of additives VC, 3000 tons of FEC, as well as a larger industrial layout in the long term. Electrolyte materials and fluorine-containing fine chemicals have certain technical commonality, and the technical accumulation in the fields of fluorine-containing fine chemicals, such as distillation technology and integrated design capability of process equipment, is the core advantage of the company's entry into lithium electric materials. help the company to have a strong competitiveness in purification, device scale-up and other links to shorten the production capacity climbing cycle.

The industrial discourse power in the field of electrolyte is expected to be transferred to the upstream competitive manufacturers. In the electrolyte material industry, the upstream material production is mainly through chemical polymerization, while the electrolyte link mainly uses electrolytes, solvents and additives for physical mixing according to the formula. In general, chemical polymerization has higher technical barriers than physical mixing. In the medium and long term, the industrial discourse power in the electrolyte field is expected to be transferred to the upstream competitive manufacturers. While the company distributes LiPF6, LiFSI, VC and FEC at the same time, it has deep precipitation in fluorine chemical polymerization production, and will have more and more significant competitive advantage in the electrolyte industry chain in the future.

Profit forecasts and valuation recommendations. We estimate that the operating income of the company from 2021 to 2023 will be 45.81 million yuan, 74.97 billion yuan, 10.255 billion yuan, respectively, and the return net profit will be 5.51 million 12.07 million yuan, respectively, and the corresponding PE will be 16.9 million yuan, 10.7 times. On the one hand, the company is based on technology accumulation in the field of fluorine-containing fine chemicals, and the production of lithium materials such as LiPF6, LiFSI, VC will increase profits, on the other hand, it may benefit from the transfer of industrial discourse power from electrolyte to upstream core materials, and its competitiveness in the field of lithium battery electrolyte has been continuously strengthened. Cover for the first time, giving a "buy" rating.

Risk hint: the new production capacity of lithium materials is not as expected, the price of lithium materials is falling, and the performance of traditional business is lower than expected.