Main points of investment
The price of electrode foil has risen, contributing to the outbreak of performance. 2021H1 realized revenue of 777 million yuan, + 44.04% year-on-year, and net profit of 86.69 million yuan, + 56.46% year-on-year. Q2 single-quarter revenue and net profit reached an all-time high, with revenue of 430 million yuan, year-on-year + 39.57%, month-on-month + 23.88%, return to the mother net profit of 56.42 million yuan, year-on-year + 85.60%, month-on-month + 86.43%. The performance behind the extraordinary: (1) price: Q2 gross profit margin increased 3.2pct to 26.4% month-on-month, a two-year high single-quarter gross profit margin, H1 electrode foil price increase effect appears, but we estimate that Q2 price increase will be more significant in Q3 (2) quantity: all the IPO investment projects of the company reached production and concluded smoothly, and the volume began to help 21H1 output reach a new high in Q2. We believe that the performance flexibility brought by volume will be more significant in the second half of 2021. (3) structure: the volume of high-end products, in the first half of the year, the company completed the development of electrode foil products for solid-state aluminum electrolytic capacitors in the field of automotive electronics, and began small-scale trial production. at the same time, ultra-high specific capacitance electrode foil products in 5G field have entered the stage of mass production, indicating that the company's products are transforming to high-end products, and the company's profitability will continue to be strengthened in the future.
The company continues to expand its production capacity to meet the opportunities of 5G and new energy development, and is committed to becoming a leader in the energy storage materials industry. The company currently has about 3000 million square meters into foil production capacity, the scale is in the forefront of the industry. The company's non-public offering was approved in May 2021, and it is expected to add about 1570 square meters of foil production capacity, which will be mainly used in 5G, new energy, automotive electronics and other fields. we estimate that the proportion of the company's new areas (electric vehicles, charging piles, photovoltaic wind power, 5G, etc.) has reached about 20%. With the commissioning of non-public offering projects and change fund-raising projects in the next two years, the proportion of new areas may reach about 50%. And the company's foil production capacity is expected to reach 5000 million square meters in 2023, profits will continue to increase.
Investment suggestion: the company is committed to becoming an industry leader, with the planning goal of steadily ranking in the top three in the industry. With the approval of the company's non-public offering project and the gradual expansion of the fund-raising project, we believe that the company's electrode foil production capacity is expected to reach 3000 amp 4000 million square meters respectively in 2021-2023. At the same time, the company's product structure optimization has gradually shifted to high-end, emerging applications. The outbreak of downstream demand and tight supply and demand will lead to a rebound in product prices, and the company will usher in a simultaneous rise in price and volume. Accordingly, we expect the company's 2021-2023 net profit to be 2.10,3.01 and 380 million yuan respectively. Based on the closing price on August 10, the PE for 2021-2023 is expected to be 20.2X, 14.1X and 11.2X, respectively, maintaining the "prudent overweight" rating.
Risk tips: terminal demand is not as expected, capacity delivery progress is low as expected, and the price of electrode foil has fallen sharply.