Event: the company released the first three quarters results report, Q1-Q3 achieved operating income of 4.724 billion yuan, year-on-year + 177.52%, return to the mother net profit of 600 million yuan, year-on-year + 151.35%.
Comments:
The new energy vehicle industry maintained a high demeanor, and the performance of Q3 increased significantly. Company Q3 realized operating income of 2.026 billion yuan, year-on-year + 220.46%, month-on-month + 94.06%, return to the mother net profit of 246 million yuan, year-on-year + 214.27%, month-on-month + 72.03%; sales gross profit 19.35%, year-on-year-6.55pct, month-on-month-1.16pct, sales net profit 12.14%, year-on-year + 0.07pct, month-on-month-1.55pct, total fees 4.27%, year-on-year-3.31pct, month-on-month + 1.12pct. The substantial improvement in performance is mainly due to the high demeanor of the new energy vehicle industry, the batch delivery of new products such as intelligent thermal management and new energy electric drive business, the comprehensive production capacity of lithium iron phosphate, a substantial increase in orders and an increase in market share.
Production and sales are booming, and the business of precision auto parts is expected to grow. In terms of production capacity, the company has 340,000 sets of precision parts of gearbox hydraulic control assembly, 7 million sets of gearbox solenoid valves, 600000 sets of electronic pumps, 300000 sets of electronic oil pumps, 2.5 million sets of GDI pump shell, 400,000 sets of gear shafts and 180000 sets of reducer shell annual production capacity; the annual production capacity of vehicle electric drive reducer reaches 360000 sets, and the company expects to form 660000 sets of production capacity by the end of 2022. In terms of orders, VVT projects for customers such as BYD, Changan, Geely, Guangzhou Automobile and SAIC have been mass produced; electronic water pumps have been mass produced in Geely and Great Wall; solenoid valves have been designated by BYD; range enhancers have been designated by BYD, Changan, Chery and mainstream new forces; intelligent thermal management integration module has newly obtained the fixed point of pure electricity new power project, and the fixed range extension new power project is in normal production and transformation, and the company expects mass production in 2023. In addition, electronic oil pumps, gears, intelligent suspension and other products have also been recognized by customers, have achieved mass production or will gradually achieve mass production.
In close cooperation with upstream and downstream high-quality customers, iron-lithium cathode materials have strong certainty in production and marketing. In February, Ningde Times increased its capital by 144 million yuan in Jiangxi sublimation. After the completion of the capital increase, the company sublimated 60% of Jiangxi's shares. Ningde Times held 20% of the shares. In September, the company signed a "Project Investment Cooperation Agreement" with Ganfeng Lithium. The two sides plan to jointly invest and set up a joint venture company to build a new integrated project with an annual output of 200000 tons of lithium dihydrogen phosphate. In October, the company signed a "Strategic Cooperation Agreement" with Jiangxi Special Motor Co., Ltd. to participate in the Jiangte Motor Yifeng Lithium Salt Project (10%) and set up a joint venture company (51%). To carry out technical research and development and industrial investment in the preparation of lithium dihydrogen phosphate from lithium sulfate The company's annual output of 80,000 tons of lithium iron phosphate project has been completed in September, the subsidiary Jiangxi sublimation plans to start the first phase of the project in the existing plant area of Yichun base, and invest in the new annual production capacity of 150000 tons of new high-pressure solid lithium iron phosphate and supporting main materials integration project. We believe that lithium iron phosphate oxalate process, as a new generation of high-density lithium iron phosphate material, has the advantages of high compaction density, good cycle life and low temperature performance, and has been recognized by first-line customers; cooperation with upstream suppliers can enhance the stability of lithium raw material supply, and cooperation with downstream core customers can improve the sales certainty of iron-lithium cathode materials, thus helping the company to turn production capacity into performance.
Profit forecast and investment rating: the company is the leading automotive precision parts and iron lithium cathode material leader in China, and is expected to continue to benefit from the high demeanor of the new energy automobile industry. We estimate that the return net profit of the company from 2022 to 2024 is 10.16,14.70 and 1.912 billion yuan, and the corresponding PE is 17,12 and 9 times respectively.
Risk factors: raw material price fluctuations, capacity release is not as expected, customer development is not as expected, epidemic relief is not as expected.
