The net profit of returning home in the first half of the year was 79.91 million yuan, down 3.80% from the same period last year. The company's operating income in the first half of the year was 941 million yuan, + 22.58% compared with the same period last year. The overall gross profit margin remained stable in the first half of the year, due to the substantial increase in sales volume and average sales price of ferric phosphate, the company's main product of battery materials, and the decline in sales of DSD acid, the main product of dye intermediates, due to the market environment.
The gross profit of dyes and agricultural intermediates in the first half of the year was 109 million yuan, down 32.8% from the same period last year; the gross profit margin decreased 5.3 percentage points to about 22.9%. The downstream customers of dye intermediates stopped production for a long time, and the sales of DSD acid decreased compared with the same period last year. The mononitrotoluene produced by the company can stabilize the supply of upstream raw materials. The income of dyes and agrochemical intermediates was 474 million yuan,-17.3% of the same period last year. Among them, the income of dye intermediates is 134 million yuan,-63.8% compared with the same period last year; the income of agrochemical intermediates of the company is 341 million yuan, + 66.6% compared with the same period last year, which is an active market competition strategy.
The gross profit of battery materials in the first half of the year was 77.4 million yuan, an increase of about 11 times compared with the same period last year; the gross profit margin increased by 63.5 percentage points to about 30.8%. The sales unit price of iron phosphate products has been kept at a high level in the first half of the year, and the downstream customer expansion is making good progress. The company maintains close cooperation with Changzhou Lithium Source, Hefei Rongjie Energy Materials Co., Ltd., Jiangxi Zhili, etc., and provides strong support for the supply chain guarantee of lithium iron phosphate customers.
The gross profit of pigment intermediates in the first half of the year was 76.3 million yuan, an increase of 26.1% over the same period last year; the gross profit margin decreased by 0.3 percentage points to about 38.5%. The prices of bulk raw materials rose, and the sales unit prices of pigment intermediates rose compared with the same period last year. The income of the pigment intermediate sector in the first half of the year was 198 million yuan, a year-on-year increase of 27.2%.
The decline in export earnings in the first half of the year was mainly due to the decline in sales of DSD acid. Export earnings in the first half of the year totaled 177 million yuan, down 18.9 percent from the same period last year. Different countries' progress in epidemic control led to different rates of economic recovery in different countries, and the recovery rate of the domestic market was faster than that of foreign markets, so the volume of domestic sales recovered faster than exports. At the same time, at the present stage, the global lithium iron phosphate industry chain is still dominated by the domestic market, and the demand for iron phosphate products in foreign markets is relatively low.
Profit forecast and investment rating: we estimate that the net profit of Lottery New Energy in 22-24 years is 2.50,3.52 and 410 million yuan respectively, and the corresponding EPS is 0.25,0.35,0.40 yuan respectively. Based on the valuation of comparable companies in the same industry and considering that the valuation of Hong Kong stocks is lower than that of A shares, we give Lottery New Energy 7 times the PE valuation in 2022, which is calculated at the exchange rate of HK $0.84. the corresponding target price is HK $2.08, maintaining the "better-than-market" investment rating.
Risk tips: macro environmental risk; foreign exchange risk; raw material price fluctuation risk; market environment deterioration risk.
