Performance review
3Q22 performance is in line with our expectations
The company announced 3Q22 results: 1-3Q22 revenue of 12.7 billion yuan, an increase of 180% over the same period last year, and a net profit of 1.11 billion yuan, an increase of 129% over the same period last year. Of this total, 3Q22 revenue was 5.06 billion yuan, an increase of 200% over the same period last year, and its net profit was 360 million yuan, an increase of 105% over the same period last year, which is in line with our expectations as a whole.
Trend of development
The company's production and sales are booming during the 3Q22 period, and the purchasing and sales strategies actively adjust the price fluctuations of hedging precursors. The company's 3Q22 shipment volume is about 17000 tons, according to our estimate, the net profit per ton is more than 20,000 yuan, which is a certain decline compared with 2Q22. We believe that it is mainly due to the slowdown in the growth rate of lithium carbonate prices during the 3Q22 period, which significantly weakens the overall thickening effect on the company's net profit per ton. In addition, the company adjusts the pricing strategy of procurement and sales in time to avoid the cost impact on the purchase of precursors in the process of price fluctuations such as cobalt and nickel.
The demand for medium-nickel high-voltage products is strong, and 4Q is expected to maintain high growth. Since the beginning of this year, the proportion of shipments of medium-and low-nickel high-voltage products has further climbed to more than 80%. We believe that on the one hand, due to the high cost of raw materials, domestic downstream car companies have chosen medium-nickel high-voltage products; on the other hand, the proportion of high-nickel purchases has decreased due to weak overseas demand. Looking ahead, the demand for nickel high-voltage products in the company is good, and orders are strong. According to the October production forecast of Xinhuulu Lithium Power, we expect 4Q22 shipments to reach the level of close to 25000 tons.
The progress of new products is advancing rapidly, and we are optimistic about the continuous iteration of the company's ultra-high nickel products. The company's two ultra-high nickel products NCA and NCM products are shipped more than 100 tons per month, and the progress of ultra-high nickel single crystal is also rapid.
We expect the follow-up to contribute to the rapid growth of the company's performance.
Profit forecast and valuation
The homing net profit forecasts of 1.42 billion yuan and 1.94 billion yuan in 2022 and 2023 will remain unchanged. The current share price corresponds to a price-to-earnings ratio of 20.9 times 2023 / 15.3 times earnings. Maintain an outperform industry rating and a list price of 20.00 yuan, corresponding to 27.2 times 2022 price-to-earnings ratio and 19.9 times 2023 price-to-earnings ratio, which has 29.8% upward space compared with the current stock price.
Risk.
Downstream demand fluctuation risk, raw material price fluctuation risk, capacity expansion is less than expected risk.