Zheshang Securities: Gives Tianqi materials a buy rating

2022-01-20Zheshang Securities Co., Ltd. Deng Wei conducted a study on Tianci Materials and released a research report "Tianci Materials 2021 Performance Review Report: Electrolyte Faucet Q4 Share Is Solid, and the Sword of Execution Technology Passes Through the Cycle", this report gives a buy rating to Tianci Materials, and the current stock price is 95.9 yuan.

Gifted Materials (002709)

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The company released the 2021 performance forecast, and the net profit attributable to the mother in 2021 is expected to reach 2.100-2.300 billion yuan, +294%-332% year-on-year. Net profit after deduction of non-attributable to the mother is expected to reach 2.059-2.259 billion yuan, +290% -238% year-on-year.

Investment essentials

Q4 Delivery volume has increased significantly, and the transmission of raw material price increases is lagging behind

Q4 is expected to achieve a net profit attributable to the mother of 546-746 million yuan, +3668%-5048% year-on-year, down 29%-3% month-on-month; Q4 to achieve a net profit of 549-749 million yuan, +4273% -5868% year-on-year, down 26% - up 1% month-on-month. Mainly due to: (1) Q4 electrolyte delivery is expected to reach more than 50,000 tons (a high increase of 40% +), self-produced 6F raw materials in the short term can not keep up with the rapid growth of shipments, self-supply rate fell to about 70%, in order to protect the market share of some of the raw materials mined, (the purchase price with the market, more than 500,000 yuan / ton), while considering the long-term customer strategy, take the initiative to bear part of the cost pressure, not downward transmission; (2) lithium carbonate Q4 has been adjusted, but 22Q1 will raise the price, cost transmission is also lagging behind. (3) Partial impairment is expected in Q4.

The self-supply 6F capacity continues to climb, and profitability will cross the inflection point

2022Q1 The company's 6F production capacity is expected to further climb to about 32,000 tons, and the 6F self-supply rate is expected to increase to nearly 90% under the Spring Festival effect, and it is expected to maintain a self-supply rate of more than 80% throughout the year. In the first half of 2022, the supply of 6F is still tight, the space for loose monotonous prices is relatively large, the cost pressure Q1 can be moderately transmitted, and the unit profitability is expected to be repaired. In 2022, the company will increase the 6F production capacity to 60,000 tons through technical transformation, and it is expected to put into production another 50,000 tons in 2023, consolidating the leading position, and on the basis of the strategic cooperation with downstream major customers in the early stage, the cost advantages brought by the superposition of scale effects and process technology are superimposed, and the profitability is expected to be guaranteed even at the bottom of the cycle. The company's next generation of high-end product layout is at the forefront, LiFSI, ODFP, ODFB, solid-state battery electrolyte, etc. may become one of the company's core competitiveness in the next stage.

Earnings forecasts and valuations

It is expected that the company's net profit attributable to the parent company in 2021-2023 will reach 2.300/39.58/5.138 billion yuan, corresponding to the current share price PE of 39.75/23.09/17.79 times, maintaining the Buy rating.

Risk Warning

The release of production capacity is less than expected, raw material prices fluctuate sharply, and product prices fall rapidly.

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 175.11; 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)