Event: the company issued a half-year profit forecast for 2021. It is expected that during the reporting period, it will achieve a net profit of RMB 575-595 million, an increase of RMB 617-637 million over the same period last year. Among them, Q2 achieved a net profit of RMB 3.43-363 million in a single quarter, an increase of RMB368-388 million over the same period last year, and an increase of 47.9% and 56.5% compared with the same period last year.
Comments:
New energy vehicle market continues to grow, power battery shipments continue to climb since September 2020, with the vigorous development of new energy vehicle industry, China's new energy vehicle production and sales have increased rapidly, and power battery shipments have also continued to increase: 2021H1 domestic production and sales of new energy vehicles are 1.284 million and 1.206 million respectively, up 224% and 207% respectively over the same period last year. Q2 domestic production and sales of new energy vehicles in a single quarter were 731000 and 691000 respectively, an increase of 168% and 148% respectively over the same period last year, and an increase of 32% and 34% respectively compared with the same period last year. 2021H1, the installed capacity of domestic power batteries 52.5GWh, increased by 200.3% compared with the same period last year. Q2 realized the installed capacity of 29.3GWh in a single quarter, an increase of 26% compared with the previous quarter.
The rising demand leads to a rise in product prices, and the company's performance has been fully released. The continuous improvement of downstream demand has led to a continuous increase in the demand for lithium-ion battery electrolytes, and the price of electrolyte solvents has risen obviously: the average prices of the main solvents DMC, EMC, DEC, EC and PC for 2021H1 lithium-ion battery electrolytes are 1.17,2.17,1.98,1.22 and 14,000 yuan / ton, respectively. Increased by 66%, 73%, 55%, 44% and 46% respectively over the same period of last year. The average prices of DMC, EMC, DEC, EC and PC in Q2 in a single quarter were 1.11,2.17,2.05,1.15,14,000 yuan per ton, up 53%, 67%, 56%, 35% and 47% respectively over the same period last year, with month-on-month changes of-11%, 0%, + 8%,-11% and 0%, respectively. The company actively distributes the new energy solvent business. The existing DMC equity production capacity is 105000 tons, EMC equity production capacity is 40,000 tons, EC equity production capacity is 33000 tons, and 120000 tons of electrolyte solvents are under construction. In the environment of rising demand for power batteries and rising solvent prices, the company relies on its own technical advantages and scale advantages, the profitability of solvent products has improved significantly, and the overall performance of the company has also been fully released.
Earnings forecast, valuation and rating: as the price of solvents such as DMC continues to rise, the company's cost advantage is becoming more and more obvious, superimposing the company's capacity expansion, and profitability is greatly enhanced. Therefore, we have raised our profit forecast for the next three years and expect the company's return net profit in 2021-2023 to be 991 million (up 98 per cent), 1.147 billion (up 78 per cent) and 1.313 billion (up 84 per cent), respectively. In the environment of the rapid increase in demand of the new energy vehicle industry chain, the electrolyte solvent products with cost advantages will continue to bring high profits for the company and will continue to improve in the future. So we upgraded to the "buy" rating.
Risk hint: the new project is less than expected when it is put into production; the global demand for power batteries is not as high as expected.