Incident: On 2/26, based on confidence in future development prospects and value recognition, the company issued a “Double Improvement of Quality and Return” action plan to protect the interests of all shareholders of the company, enhance investor confidence, and promote the company's long-term healthy and sustainable development.
Deeply involved in the lithium battery industry for more than 20 years, diversified business development: the company has been deeply involved in the lithium battery industry since 1997, and has become a leading global enterprise in the consumer battery field, cooperating with leading global consumer electronics brands; power batteries focus on square aluminum case batteries, covering BEV, EREV, PHEV, HEV and other application markets, and actively develop high-end markets and ultra-fast charging products; energy storage covers five major business fields including electric energy storage, industrial and commercial energy storage, household energy storage, network energy and smart energy. At present, downstream customers are increasingly accepting pack+ cell solutions, and demand for terminals is gradually recovering. The company's self-supply rate for consumer batteries such as mobile phones and laptops continues to increase; at the same time, the company's overall scale is expected to continue to grow, and profitability is expected to continue to increase.
Continuously improve innovation capabilities and drive high-quality development: The company's R&D investment CAGR reached 23.2%, R&D personnel CAGR reached 18.34%, and R&D investment and R&D personnel increased steadily. Currently, the company has more than 3,000 invention patents, utility model patents and design patents. Consumer batteries have R&D and production capabilities for silicon anode batteries; power batteries have released ternary 4C ultra-fast charging products, and are iteratively developed in 5C and 6C products, and 4C lithium iron phosphate batteries have been developed; energy storage systems can achieve intelligent energy scheduling at charging stations with integrated optical storage and charging inspection to ensure the safe and efficient operation of equipment.
Stable cash dividends, active repurchases, and emphasis on investor returns: While maintaining innovation in various businesses and achieving high-quality development, the company continues to stabilize cash dividends and actively repurchase shares. The cumulative cash dividend for 2011-2022 was 1,165 billion yuan, and profits distributed in cash in 2020-2022 accounted for more than 10% of the average annual distributed profit. Meanwhile, in February of this year, the company announced a new round of stock repurchase plans. It plans to use its own funds to repurchase 3-5 billion yuan of the company's shares through centralized bidding. The repurchase price will not exceed 19.9 yuan/share (inclusive). The repurchased shares will be cancelled to actively give back to market investors.
Investment advice: Considering that the consumer electronics industry is still recovering weakly, and competition in the power battery and energy storage systems sector is still fierce, we lowered our previous profit forecast. We estimated the company's net profit to be 11/13/1.6 billion yuan in 2023-25, corresponding to PE of 24/20/16 times, maintaining a “buy” rating.
Risk warning: Market competition intensifies, downstream demand recovery falls short of expectations, energy storage business development falls short of expectations, and the risk of untimely updates of research and usage data.