The company issued a performance forecast for 2022, which is expected to achieve a profit of 8.68-938 million yuan for the whole year, an increase of 60.26% and 73.19% over the same period last year. The company has deepened the relationship between major customers, steadily promoted production capacity construction, continuously consolidated its market position, and maintained its holding rating.
Support the main points of rating
Forecast 2022 profit of 8.68-938 million yuan, in line with expectations: the company issued a 2022 performance forecast, which is expected to achieve a profit of 8.68-938 million yuan, an increase of 60.26% and 73.19% over the same period last year, and a deduction of 8.23-893 million yuan for non-profit, an increase of 59.81% and 73.40% over the same period last year. According to our estimates, the company is expected to make a profit of 275-345 million yuan in the fourth quarter of 2022, an increase of 10.12%-38.20% month-on-month; deducting non-profit 2.66-336 million yuan, an increase of 14.40%-44.52% month-on-month. The company's performance is in line with expectations.
Expected fourth-quarter profitability month-on-month repair: due to the climbing of new production capacity, the company's third-quarter gross profit margin fell 2.69 percentage points to 22.38%. It is expected that in the fourth quarter, the production capacity of Sichuan and other places will climb smoothly, the European market will gradually increase, the company's overall farming rate will increase, and its profitability will be repaired month-on-month.
Deepen cooperation with major customers and make positive progress in overseas market development: the company announced on December 10, 2022 and signed a "Strategic Cooperation Agreement" with Ningde Times, valid until December 31, 2026.
The two sides will strengthen global cooperation in new technologies such as sodium ion batteries and Kirin batteries. Under the same conditions, Ningde Times gives priority to selecting Kodali as a supplier of electric core mechanical parts, with a share of not less than 40%. The company will give priority to ensuring the needs of Ningde era. The Company announced the signing of a "purchase Agreement" with ACC on December 2 and 16, 2022, respectively, stipulating that ACC expects to purchase a total of approximately 300 million sets of square lithium battery shells and covers from Kodali during the period 2024-2030. Expanding cooperation with ACC will help the company to further develop overseas markets and consolidate its competitiveness in the international market.
Production capacity construction is advancing steadily, and the new structure promotes the improvement of value: on December 28, 2022, the company announced that it intends to invest no more than 500 million yuan to build the third phase project of power battery precision structure parts in Yibin, Sichuan, which will produce power battery shells and covers. The planned production capacity is 6000 million sets per year, and the annual output value will be about 1.2 billion yuan after reaching production. Kirin batteries and large cylindrical battery structures are more valuable, and the company already has relevant technology reserves and capacity planning, and we expect the company to benefit from the release of related products in 2023.
Valuation
Under the current equity, combined with the company's performance forecast and industry conditions, we adjust the company's earnings per share forecast for 2022-2024 to 3.94 pounds 6.45 pounds 9.65 yuan (the original forecast is 3.94 pounds 6.31 pounds 9.36 yuan), corresponding to a price-to-earnings ratio of 35.3 pounds 21.5 pounds 14.4 times; maintain the overweight rating.
Main risks faced by rating
New energy vehicle industry policy does not meet expectations; downstream demand of new energy vehicles does not meet expectations; price competition exceeds expectations; market share decline risk; customer concentration risk; COVID-19 epidemic impact exceeds expectations.