Performance summary: The company achieved operating income of 382 million yuan in 2021, an increase of 81.18% over the previous year; achieved net profit of 43 million yuan, an increase of 53.91% over the previous year; achieved net profit of 38 million yuan after deducting non-return income of 38 million yuan, a year-on-year increase of 48.30%, and EPS of 0.43 yuan. The performance showed a significant reversal from the previous year.
The trend of integrating anode materials has been determined, and leading companies have further strengthened the “moat”. According to the company's annual report, graphitization accounts for about 50% of the cost of artificial graphite, and the cost of outsourced processing per ton is about 20,000 to 25,000 yuan/ton. According to GGII estimates, if the company realizes graphite Zigong in a region with policy support and low electricity costs, it can reduce costs by about 50,000 yuan/ton. At present, the company has a 3,000-ton graphite processing project, which has already been put into operation.
In addition, the company also has a 12,000-ton graphitization phase II project under construction. In June of this year, the company issued an announcement stating that the company and the People's Government of Pengxi County, Suining City signed the “Investment Agreement on the Construction Project of an Integrated Production Base for High-End Artificial Graphite Anode Materials with an Annual Production Capacity of 60,000 Tons”, with a planned investment of about 1.2 billion yuan. After the project is completed and put into operation, the company's graphite self-supply ratio will exceed 60%. Through strong financing capabilities, leading companies in the industry actively lay out integrated production of anode materials. It is expected that in the future, they will be able to seize more market space through cost advantages, and the strong will stay strong.
Downstream demand for anode materials is exploding, and various products are targeted. In 2021 H1, the country's installed capacity of power batteries was 52.5 GWh, an increase of 200% over the previous year. Demand for anode materials is expected to reach 700,000 tons and 2 million tons in 2021 and 2025. The compound annual growth rate from 2020 to 2021 was over 40%. Currently, the company is in the second tier of anode material suppliers. The customer quality is good, and the energy storage and power tool markets are growing rapidly. This type of customer has low quality requirements for anode materials, so the company's original mid-range production capacity market is also booming.
Profit forecasts and investment recommendations. The company's anode material performance will grow rapidly on the basis of a low base in 2020. At the same time, it is actively promoting the construction and layout of additional production capacity, optimizing the company's product structure and customer level, and further enhancing the company's profitability. The compound growth rate of the company's total revenue over the next three years is 80%. Considering that the company's capacity expansion rate is ahead of peers and the future layout of the company's graphitization production line, we gave the company 35 times PE in 2022, a target price of 77 yuan, covering the first “buy” rating.
Risk warning: the completion and production progress of projects under construction or the risk of falling short of expectations; risk of external processing; risk of fluctuations in raw material prices; risk of accounts receivable.