Revenue in 2022 was 17.98 billion yuan, +162.8% year on year; net profit of 1.49 billion yuan, +112.6% year on year; net profit of non-return mother was 1.44 billion yuan, +110.7% year on year. Among them, Q4 revenue in 2022 was 5.28 billion yuan, +129.1% year on year, +4.3% month on month; net profit of the mother was 380 million yuan, +76.0% year on year, +5.6% month on month; net profit after deducting non-homogenous net profit of 360 million yuan, +74.2% year on year, +3.4% month on month. Q4 gross profit margin 10.4% month-on-month, -3.1pct yoy, -3.6pct yoy; fee rate 3.3%, -1.2pct month-on-month, -0.5pct yoy; net interest rate 7.1%, +0.1pct month-on-month, -2.2 pct yoy.
Revenue of Q1 2023 was 1.93 billion yuan, -43.0% year-on-year, -63.4% month-on-month; net profit of the mother was 0.1 million, -99.7% yoy, -99.7% month-on-month; net profit after deducting non-return to the mother was -0.2 billion, -107.6% yoy, -105.8% month-on-month.
Gross profit margin 3.6%, month-on-month -6.8 pct, year-on-year -12.0 pct; expense ratio 4.2%, month-on-month +0.9 pct, year-on-year -0.9 pct; net interest rate 0.1% month-on-month, -7.0 pct month-on-month, -8.9 pct year-on-year.
Commentary:
Significant progress has been made in the development of multiple products, and the new patents have been very fruitful. The company has made great progress in the development of high-voltage ternary, ultra-high nickel ternary, high-power ternary, lithium iron phosphate, and sodium-electric materials, as well as research in the fields of recycling used power batteries. A power-type cathode material has received designated letters from foreign customers, three power-type high-voltage medium-high nickel ternary materials have been industrialized, a cost-effective high-power ternary cathode material for hybrid vehicles has been mass-produced, and ultra-high nickel 9 series materials have completed development and production line verification from precursors to cathode materials, and mass production and sales at the 100-ton scale have been achieved. In addition, the company continues to invest heavily in R&D, expand the size of the R&D team, improve the technical level of cathode material preparation, continuously improve the original products and develop new products. In 2022, 21 new invention patents and 10 utility model patents were obtained; a total of 88 invention patents and 35 utility model patents were obtained. As of December 31, 2022, the company obtained 123 patents.
Key projects continue to advance. The company promoted the expansion of cathode material production capacity in an orderly manner, and carried out project construction, equipment procurement, equipment commissioning and other work according to the plan. The second phase of the 2022 fund-raising project to expand the production of lithium battery cathode materials for automotive lithium batteries was successfully put into operation, and construction of a lithium iron phosphate project with an annual output of 60,000 tons was actively promoted. After production results are achieved, the company's cathode material production capacity will be further increased.
Investment proposal: Based on the continuous investment of the company's production capacity and continuous improvement of core technology, and taking into account the slowdown in NEV sales growth and changes in raw material prices, we expect the company's net profit to the mother in 2023-2025 to be 952/15.33/1,986 billion yuan respectively (original value of 1,881/23.28/100 billion yuan), and the current market value corresponding to PE is 22/14/11 times respectively. Referring to the valuations of comparable companies, 16xPE in 2024 was given, with a corresponding target price of 12.7 yuan, maintaining the “strong push” rating.
Risk warning: New energy vehicle market demand falls short of expectations, market competition intensifies, raw material supply and price fluctuations, technology route substitution, etc.