Event

On August 15, the company released its semi-annual report for 2020, with operating income of 105 million yuan, an increase of 81.31% over the same period last year, and a net profit of 10.83 million yuan.

Comment

The two main businesses of space power and special lithium power both achieved good growth on August 15, and the company released its half-yearly report in 2020, with operating income of 105 million yuan, an increase of 81.31% over the same period last year, and a net profit of 10.83 million yuan, turning losses into profits. Of this total, space power achieved operating income of 35.78 million yuan, an increase of 162% over the same period last year, and a net profit of 6.13 million yuan, turning losses into profits over the same period last year. Lishen Special Power achieved operating income of 69.37 million yuan, an increase of 56% over the same period last year, and a net profit of 9.17 million yuan, an increase of 56% over the same period last year.

The reasons for the significant year-on-year increase in revenue include: 1) the recognition time of the company's space lithium-ion power business revenue is greatly affected by the project acceptance time arrangement of the end customers, the projects that completed acceptance and related revenue recognition increased in the first half of the year; 2) sales orders for special lithium-ion batteries used in non-space areas increased compared with the same period last year.

In the future, the number of satellite launches will increase exponentially on the existing basis, which will bring great growth opportunities for space power sources.

The second research lab, the predecessor of space power, previously occupied more than 50% of the market share in the field of domestic space energy storage batteries and had a strong technical force. Its space energy storage power products are widely used in communication satellites, navigation satellites, high-score satellites, remote sensing satellites and other scientific test aircraft. with the help of strong technical strength and profound technical accumulation, it has established a good and stable business relationship with relevant customers in the domestic satellite field, which has laid a good foundation for long-term business development.

Space power is located downstream of the traditional market segment continues to grow steadily, the rapid development of commercial aerospace plate will drive the company's rapid development. On the basis of maintaining the existing market, the company actively develops the in-depth market, increases the market share of old users, grabs new users and new fields, and carries out a number of satellite development tasks. In order to meet the requirements of rapid production, rapid assembly, long in-orbit life and high reliability, the company has launched a new product with long life and high reliability, which meets the power demand of commercial aerospace satellite. According to the current development situation, the number of satellite launches in the future will increase exponentially on the existing basis, which provides a broad demand for the development of supporting power products.

With the steady development of the information equipment supporting by Lishen Special Power Institute, the special vehicle power battery has become a new growth point. Lishen special electric products mainly include lithium-ion battery pack and charging equipment, high-energy lithium fluorocarbon primary battery and battery pack. There are more than 300 product models, and it has become the largest supplier of lithium-ion battery packs for special communication equipment and special portable UAV in China. In the future, in addition to maintaining market share in traditional advantages such as communications and single-person equipment, Lishen Special Power will invest heavily in high-energy equipment, underwater special equipment, drones and other industries.

Lithium-ion batteries and matching chargers, as the main components of information equipment, were further developed in the first half of 2020. Special vehicle power batteries opened the prelude to batch orders, opening up a new market for the application of special lithium-ion batteries. The hybrid all-terrain vehicle successfully developed by Lishen Special Power Co., Ltd., which has been successfully developed by the whole vehicle factory, began to enter the stage of trial production and finalization. The small batch order of the battery pack was realized in the first half of the year, and the formal batch supply is expected to begin in the second half of the year, creating a new business growth point for the company. In addition, Lishen Special Power ranks among the best in the field of high-end AGV supporting lithium iron phosphate batteries. China first launched battery pack technology with essential safety characteristics, and has promoted the application of related products of this technology in some customers' intelligent warehouses, providing technical guarantee for the company to stabilize and expand AGV supporting market share.

As the listed company platform of China Electric Power God, it is expected to obtain other high-quality asset injection. China Power God is a professional sub-group in the electric energy field established by China Electric Power Science, which has strong scientific research strength and industry position in the electric energy field. entrusted with the management of 18 institutes, and authorized to manage the shares held by China Electric Power Company, and to carry out the integration and reorganization of business assets and resources related to energy security. And undertake the follow-up business reform work.

Some of the underlying assets to be injected into listed companies this time are originally public institution assets, and remarkable scientific and technological achievements have been made in related business fields. after listing, this asset will eliminate the institutional obstacles that restrict the development of the underlying assets. improve the modern enterprise system, stimulate the enthusiasm of technicians, and speed up the transformation efficiency of technological innovation and technological achievements, so as to improve the economic benefits of the existing business. It is helpful to gradually improve the original fixed user-oriented goal of the underlying assets, accelerate technology upgrading, reduce product costs, expand product market share, and then enhance the overall business competitiveness. It is helpful to promote the relevant assets to become the market main body with core competitiveness and independent development ability. In the future, the company is expected to be the listed company platform of China Power God and get other high-quality asset injection.

Profit forecast and investment rating: space Power and Lishen Special Power have entered a period of rapid development, the asset injection of major shareholders is worth looking forward to, maintaining the "buy" rating companies have a deep accumulation in the field of space lithium batteries and have a high market share. Subsidiary space power is expected to fully benefit from the rapid development of the commercial aerospace industry represented by the Leo broadband Internet satellite constellation project. In the field of storage batteries, such as special communication equipment and special portable drones, the subsidiary Lishen Special Electric downstream equipment has been released one after another, and the company's performance is expected to continue to grow; as the capital operation platform of China Electric Power, high-quality assets are injected into the sub-group. It is estimated that the company's homing net profit from 2020 to 2022 is 0.98,1.96 and 260 million yuan respectively, an increase of 23%, 100% and 33% respectively over the same period last year. The corresponding EPS for 20-22 years is 0.12,0.24,0.32 yuan respectively, and the corresponding share price PE is 55,28,21 times respectively, maintaining the "buy" rating.

Risk Tips:

The development rate of commercial aerospace is lower than expected; the price of products is lower than expected as a result of increased competition.