On October 27, the electrolyte faucet Tianqi Material (002709. SZ) closed at 162.1 yuan, up 8.21%, and once rose during the session, and the stock price hit a record high.
On the news side, on October 26, Tianci Materials announced the first three quarters of the performance report, the first three quarters of this year to achieve operating income of 6.623 billion yuan, an increase of 145.70% year-on-year; net profit of 1.554 billion yuan, an increase of 199.72%. Among them, the net profit in the third quarter was 771 million yuan, an increase of 273% year-on-year, and the single quarter has reached the level of the first half of the year.
On the same day, Tianci Materials also announced that it intends to build a "recycling project with an annual output of 300,000 tons of electrolyte and 100,000 tons of iron-lithium batteries", with an investment amount of 1.53 billion yuan.
It is worth noting that the latest market value of Tianci Materials has reached 154.8 billion yuan, a cumulative increase of 166% this year; if calculated from the beginning of 2020, Tianci Materials has increased by more than 12 times, the increase can be described as amazing.
01 The advantages of the layout of the integrated industrial chain highlight the performance explosion
The financial report shows that in recent years, the performance of Tianqi Materials has climbed all the way. From 2017 to 2020, revenue nearly doubled from $2,057 million to $4,119 million; net profit grew from $301 million to $533 million. In the first three quarters of this year, the revenue of Tianci Materials reached 6.623 billion yuan and the net profit reached 1.554 billion yuan.
The market share of Tianci Materials also increased from 15.7% in 2017 to 26.8% in 2020, and the gap with the second place market share widened from 0.1% to 12.2%.
In a few years, Tianzi Materials can achieve such beautiful results, mainly driven by three major factors.
The first is to benefit from the high prosperity of the new energy industry.
With the "double carbon" development goal proposed, the electric vehicle industry has entered a period of high-speed discharge. Downstream demand outbreak, and lithium battery upstream of a variety of materials supply is insufficient, resulting in soaring prices, especially the raw material of the electrolyte lithium hexafluorophosphate, this year has risen amazingly. The data shows that the price of lithium hexafluorophosphate has risen from the price of 102,500 yuan / ton at the beginning of the year to the current 525,000 yuan / ton, with a price increase of more than 412%.
On October 26, the State Council issued the Carbon Peak Action Plan by 2030. The plan proposes to vigorously promote new energy vehicles, and by 2030, the proportion of new energy and clean energy-powered means of transportation will reach about 40%. It is foreseeable that the market demand for lithium batteries will continue to expand in the future.
Second, the advantages of vertical integration of the industrial chain of Tianci materials are highlighted, and the position of the electrolyte brother is stable.
Looking back at the development history of Tianqi Materials, Tianqi Materials started in the field of fine chemical daily chemicals, began to cut into the field of electrolyte in 2005, and realized self-production of lithium hexafluorophosphate in 2011. After 2015, Tianci Materials began to go farther and farther on the road of vertical integration of the electrolyte industry chain, including the layout of lithium salt solute and various additives, EMC, DMC electrolyte solvents, etc. At the same time, Tianci Materials also entered the cathode business horizontally, laying out the upstream spodumene, hydrofluoric acid, lithium carbonate, and mastering the cathode production capacity of lithium iron phosphate.
The biggest advantage of the vertical integration layout of the industrial chain is that it can not only control the upstream cost, but also ensure the downstream supply. In terms of the production cost of lithium hexafluorophosphate alone, Tianqi Material can open up about 40% of the gap with its peers, which is a great competitive advantage of Tianqi Materials.
Third, cooperative customers cover mainstream lithium battery manufacturers at home and abroad.
In terms of customers, Tianqi Materials has cooperative relations with foreign well-known customers such as CATL, BYD, LG Energy, etc., and has entered a stage of close cooperation with AESC, Northvolt, Dyson, SDI, BMW, Panasonic, etc.
This year, Tianci Materials also won a large order from LG Energy and Ningde Times, two major power battery leading enterprises.
On July 22, Tianci Materials issued an announcement that from the second half of 2021 to the end of 2023, LG New Energy purchased an estimated total quantity of 55,000 tons of electrolyte products from Jiujiang Tianci.
On May 27, Tianci Materials announced that from the effective date of the agreement to June 30, 2022, the supply of lithium hexafluorophosphate to CATL is expected to use 15,000 tons, and analysts estimate that the one-year framework agreement may be worth more than 6.7 billion yuan.
02 Embrace the downstream boom and accelerate the pace of expansion
In order to seize market opportunities and enhance the profitability of enterprises, major lithium battery raw material manufacturers represented by Tianci Materials are working intensively to accelerate the layout of related businesses.
On October 26, Tianci Materials announced that the company intends to invest in the construction of a "300,000 tons of electrolyte and 100,000 tons of iron lithium battery recycling project" through the establishment of a wholly-owned subsidiary, with a project construction period of 18 months. It is expected that after the project reaches production, it will achieve an average annual revenue of 8.691 billion yuan and an average annual net profit of 542 million yuan.
In fact, since the beginning of this year, Tianqi Materials has carried out a number of large-scale expansion layouts.
Most recently, on September 28, Tianci Materials disclosed that the company intends to invest in the construction of the "41,000 tons per year lithium-ion battery material project (Phase I)", with a total investment of 935 million yuan.
Prior to this, on August 24, Tianci Materials issued four expansion announcements, including the annual output of 350,000 tons of lithium batteries and fluorine-containing new materials project (Phase I), the annual output of 200,000 tons of lithium battery materials project, the annual output of 95,000 tons of lithium battery basic materials and 100,000 tons of dichloropropanol project; and the proposed construction of a wholly-owned subsidiary "waste lithium battery resource recycling project".
On June 18, Tianci Materials issued three expansion announcements, which will invest more than 2 billion yuan to expand production capacity, including the 62,000 tons of electrolyte basic materials project, the annual output of 300,000 tons of iron phosphate project (Phase I), and the annual output of 152,000 tons of lithium battery new material project.
At present, Tianci Material Electrolyte has built a production capacity of 150,000 tons, accounting for about 30% of the domestic electrolyte market capacity, ranking first in the market; lithium hexafluorophosphate production capacity is 12,000 tons, the proportion of self-supply is about 80%. It is expected that by the end of 2021, Tianci Materials will have 200,000 tons of electrolyte and 35,000 tons of lithium hexafluorophosphate production capacity.
epilogue
For the future trend of the stock price of Tianci Materials, most securities companies are optimistic.
Dongguan Securities believes that Tianci Materials' electrolyte market share remains leading, and has signed long-term supply agreements with strategic customers such as CATL Times and LG Chemical, and its performance is expected to maintain rapid growth as its production capacity continues to expand. It is expected that the company's EPS in 2021-2023 will be 2.21 yuan, 3.60 yuan and 5.20 yuan respectively, corresponding to PE 66 times, 41 times and 28 times, respectively, maintaining the recommended rating.
As of October 27, 2021, a total of 23 institutions have made forecasts for the 2021 annual performance of Tianci Materials in the 6 months, predicting that the average net profit in 2021 will be 2.179 billion yuan, an increase of 308.95% over last year. Among them, 15 institutions "bought", 3 institutions "recommended", 1 institution "increased holdings", 1 institution "highly recommended", 1 institution "outperformed the industry", 1 institution "strongly pushed", and 1 institution "prudently increased holdings". The highest target price forecast is 210.00 yuan, the lowest forecast is 104.80 yuan, and the average is 162.91 yuan.