Soochow Securities: Gives Tianqi Materials a buy rating with a target price of 169.0 yuan

2022-01-19South Wu Securities Co., Ltd. Zeng Duohong, Ruan Qiaoyan, Yue Siyao conducted research on Tianci Materials and released a research report "Performance Forecast Comments: The leading position of electrolyte integration is stable, and the increase in new categories of products is obvious", this report gives a buy rating to Tianqi Materials, believing that its target price is 169.00 yuan, the current stock price is 94.61 yuan, and the expected increase is 78.63%.

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The company expects net profit attributable to the parent in 2021Q4 to be 546-746 million yuan, down 3-29% month-on-month, slightly lower than market expectations. The company expects the net profit attributable to the mother for the whole year of 2021 to be 2.1-2.3 billion yuan, an increase of 294.09% -331.62% year-on-year, of which the net profit attributable to the mother in 2021Q4 is 546-746 million yuan, an increase of 3668% -5048% year-on-year, a decline of 3-29% month-on-month, slightly lower than market expectations. In 2021, the net profit of non-attributable to the mother was 2.059-2.259 billion yuan, an increase of 289.72% -327.57% year-on-year, of which the non-attributable net profit of 2021Q4 was 549-749 million yuan, -26-1% month-on-month.

Electrolyte 21Q4 shipments increased month-on-month, and shipments in 22 years are expected to double continuously year-on-year. In terms of shipments, we expect the company to ship 51,000-52,000 tons in 2021Q4, an increase of 35% + month-on-month, and we expect to ship nearly 150,000 tons for the whole year of 2021, doubling year-on-year. In terms of profitability, the price of 21Q4 hexafluorine rose all the way to 500,000 / ton +, we expect the profit per ton of electrolyte to fall by 20% month-on-month to about 14,000 / ton, and the electrolyte business contributed about 700 million yuan of profit, a slight increase from the previous month, and it is expected that the profit of 22Q1 single ton will recover. Downstream demand in 2022 is strong, we expect that the shortage of hexafluoride will be maintained until the middle of 2022, we expect the company to ship 300,000-350,000 tons, more than double year-on-year, electrolyte long single smooth hexafluorine cyclicality, profitability is expected to be maintained.

The integrated layout of hexafluorine strengthens the leading position and increases the production capacity planning of LIFSI and various additives. The company has built three bases in Ningde, Guangzhou, Jiujiang 150,000 tons of electrolyte production capacity, after the production capacity is fully completed, the company's production capacity is expected to reach 1.4 million tons +. In addition, the company accelerated the layout of LIFSI production capacity, the company's existing new lithium salt 6000 tons production capacity took the lead in achieving mass production, mass production progress and scale of the industry first. In addition, the company also has VC, lithium difluorophosphate, DTD and other new additive production capacity will be gradually released in 22-23 years, strengthening the company's integrated competitiveness, thickening profits, and effectively hedging the downward price cycle of hexafluorine.

The traditional daily chemicals grew steadily, and the contribution of iron phosphate to part of the profit was high in 22 years. The company's previous iron phosphate business is in the pioneering period caused part of the loss, the company currently has iron phosphate production capacity of 30,000 tons, and Ningde times, Yuneng, Guoxuan, BYD and other enterprises began to cooperate, production capacity smoothly released, we expect Q4 iron phosphate business to contribute part of the profits, the company plans to build 300,000 tons of iron phosphate production capacity, we expect 22 years the company iron phosphate is expected to ship 100,000 tons + + , with the scale, the profit per ton will be significantly improved, is expected to reach 3,000 yuan / ton +. Carbomer prices fell back to normal levels, and we expect Carbomer and traditional daily chemical business to contribute about 600 million yuan in profit in Q4 21, a slight increase from the same level month-on-month. For the whole year, Carbomer is expected to contribute 100 million yuan in profits, and traditional daily chemicals are expected to contribute 100 million yuan, totaling 200 million yuan in profits. The company added 60,000 tons of daily chemical new material projects, supporting the steady growth of daily chemical business.

Profit Forecast and Investment Advice: As the downstream boom continues to exceed expectations, we adjust the company's net profit attributable to the mother in 2021-2023 to 22.02/46.01/5.500 billion yuan (originally expected 24.25/44.59/5.405 billion yuan), an increase of 313%/109%/20% year-on-year, corresponding to PE of 46/22/19X, giving 35 times PE in 2022, corresponding to a target price of 169 yuan, maintaining a "buy" rating.

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A total of 17 institutions have given ratings in the last 90 days, 14 buy ratings and 3 overweight ratings; the average target price of institutions in the past 90 days has been 174.54; the Securities Star Valuation Analysis Tool shows that Tianci Materials (002709) good company rating is 3.5 stars, good price rating is 2 stars, and valuation comprehensive rating is 2.5 stars. (Rating Range: 1 ~ 5 stars, maximum 5 stars)