1. The new energy industry has a complete industrial chain layout of upstream raw ores, cobalt salts, midstream ternary drives, and conductive agents for power battery cathode materials.
Batteries account for 81% of China's cobalt consumption structure, higher than 60.86% of the world. With the vigorous development of new energy vehicles, the amount of cobalt used in the +3C field of power batteries is expected to exceed 160,000 tons. The company's cobalt salt business currently has a production capacity of 5,000 tons, striving to achieve 20,000 tons of cobalt salt production capacity within the next three years and seize market share to expand market share. As new conductive agents, carbon nanotubes and graphene can greatly improve the cycle life and rate performance of lithium batteries. The trend of localization and the development of the lithium battery industry have brought them into a period of rapid growth. The subsidiary Qingdao Haoxin has a 15% market share of conductive agents in the first tier. Global demand for carbon nanotube conductive paste is expected to maintain a compound annual growth rate of 40.8%, with demand reaching 190,600 tons in 2023. Qingdao Haoxin has been on the BYD supplier list for many years and has established deep cooperative relationships with major customer BYD, making it a leader in conductive agent technology.
2. Driven by continuous demand for downstream cathode materials, precursor production lines are still expanding.
Jana currently has a production capacity of 22,000 tons of tertiary yuan, and after the Anglo-German and Enping projects reach production, the company will have a production capacity of more than 50,000 tons of tertiary yuan; the company continues to expand precursor production to 100,000 tons, and the scale of production capacity will enter the first echelon of the industry.
According to data forecasts, starting in 2021, Sanyuan's revenue will reach 1,419 billion yuan, accounting for 40% of the company's total revenue, and will increase year by year. It is expected to reach 3.853 billion yuan in 2023, accounting for 80% of the company's total revenue. The subsidiary Jiana Energy is located in the upper reaches of the lithium-ion battery industry chain. With the continuous spread of new energy power vehicles, 5G, and artificial intelligence around the world, industry chain dividends will continue to be released, and the company's future development can be expected.
3. The traditional ceramics business is in the first tier, and the revenue contribution is growing steadily.
As the company's traditional business, the ceramic industry's products include glazed materials and ceramic ink. Currently, the national market for rock plates and large plates is huge, and the demand for ceramic ink has also increased. Currently, ceramic ink, as one of the company's stable sources of revenue, is in the first tier in the country. The main cooperative companies include Dongpeng, Jin Yitao, Xinmingzhu, Hongyu, Marco Polo and other well-known domestic ceramic wall and floor tile manufacturers.
4. The company's valuation logic switched from ceramics to new energy sources.
Beginning in 2016, Qingdao Haoxin and Jiana Energy were gradually controlled. The company entered the field of renewable energy, forming an upstream and downstream integrated layout of upstream and downstream cobalt, cobalt salts, ternary precursors, and graphene/carbon nanotube conductors. We are optimistic about the company's high growth.
Profit forecasting and investment ratings
We expect the company to achieve net profits of 2.7, 4.2 million, and 510 million respectively from 2021 to 2023, corresponding to PE of 61.34, 40.24, and 31.67, respectively. It was covered for the first time and given a “recommended” rating.
Risk warning: The risk of policy changes related to new energy vehicles will cause sales of new energy vehicles to fall short of expectations; demand for ternary materials falls short of expectations, fluctuations in cobalt metal prices, etc., which will have an impact on the company's business.