A strategic cooperation agreement was signed with ABF to further advance the global layout. According to the company's official website, the company formally signed a global strategic cooperation agreement with American battery manufacturer American BatteryFactory (ABF) on March 18 to provide it with smart lithium battery production line services with a total target of 20 GWh. ABF focuses on lithium iron phosphate battery manufacturing. The goal is to build the first localized superbattery factory network in the US. The first phase of its production line in Tucson, Arizona is expected to be completed and put into operation in 2025. Based on this strategic cooperation, the company will become the sole equipment supplier for the first production line of the ABF Gigafactory network project. It is an important step for the company to develop the US and North American markets, demonstrating the company's market competitiveness in the field of lithium battery line solutions.
Overseas markets have great potential, and internationalization is being further promoted. In recent years, the company has set up branches/subsidiaries in the US, Sweden, Germany, Japan, South Korea, etc., and has continuously promoted internationalization in R&D and innovation, talent pool, and local services, and has established good long-term cooperative relationships with many world-renowned enterprises with its technical advantages. The company's core lithium battery equipment such as coating machines, integrated roller slitting equipment, die-cutting machines, and lithium battery line equipment can meet the needs of mainstream customers around the world in terms of performance, and have obvious advantages compared with similar foreign products in terms of sales price. The company's lithium battery complete line solution has complete independent intellectual property rights, and has delivered more than 120 complete lines to global customers. As European and American countries introduce policies to support the development of new energy vehicles, the localization trend of the NEV and lithium battery industry accelerates. As a leading global enterprise in high-end lithium battery intelligent equipment and overall solutions, the company is expected to benefit from increased demand in overseas markets in the future.
Focus on R&D and innovation to create new quality productivity. The 2024 government work report indicates that the first key task this year is to vigorously promote the construction of a modern industrial system and accelerate the development of new quality productivity. It mainly includes several aspects of promoting the optimization and upgrading of the industrial chain supply chain, actively cultivating emerging and future industries, and further promoting the digital economy and innovative development. At this stage, China's economic growth model has switched from a model driven by extensive investment to high-quality development, and the importance of green science and technology innovation is further highlighted. The company has maintained a high level of investment in R&D in recent years. In the first three quarters of 2023, the company's R&D expenses increased by 40.02% year-on-year to 1,260 billion yuan, a record high for the same period. Based on the technical characteristics of non-standard automation equipment, the company has built a relatively complete R&D system, and many core products have been replaced by imports. Based on intelligent manufacturing technology, the company has extended from lithium battery and photovoltaic equipment manufacturing to hydrogen energy, energy storage and other business sectors, and has gradually built a complete ecosystem of green intelligent manufacturing of new energy.
Driven by the dual carbon strategy, the “full value chain+full life cycle” new intelligent manufacturing solutions provide the ability to guarantee the company's market development.
Profit forecast and investment rating: The company's 2023-2025 EPS is expected to be 2.24, 2.98, and 3.61 yuan, respectively. Based on the closing price of 24.94 yuan/share on March 20, the corresponding dynamic PE is 11.13, 8.37, and 6.91 times, respectively, maintaining the company's “recommended” investment rating.
Risk warning: the company's performance falls short of expectations due to increased market competition; market risk caused by further deterioration of the comprehensive relationship between China and the US; risk of overseas business development falling short of expectations; systemic risks in domestic and foreign secondary markets.