Wang Lei and Yu Jiepan of China Post ** Co., Ltd. recently conducted research on Guoxuan Hi-Tech and released a research report "The Three Growing Potentials of the Future of the Company at the Current Point in Time", this report gives an overweight rating to Guoxuan Hi-Tech, and the current stock price is 1871 yuan.
Guoxuan Hi-Tech (002074).
Investment Essentials. The company has been deeply involved in batteries for more than ten years, and has laid out two major tracks: power and energy storage. Founded in May 2006, Gotion Hi-Tech is mainly engaged in power and energy storage battery products. The company's power energy storage battery shipments ranked eighth and sixth in the world. Looking back on the company's development history, it has completed the "single product-
Horizontal and vertical extension - globalization to the sea". From the perspective of performance, in the past two years, with the prominence of the company's scale effect and the vertical layout of the industrial chain, the company's profitability has gradually entered the harvest period, and in the first three quarters of 2023, the company's net profit deducted from the non-attributable parent company ushered in a turnaround.
Standing at the current point in time, we believe that there are three main highlights worth paying attention to:
1) Volkswagen: The fixed-point work has been completed, and it is expected to open a new chapter in mass production.
The story of cooperation with Volkswagen has been a label on the company since 2020. In the past few years, the company has successively completed equity delivery, management integration, product verification and other work. In the same year, it has successively obtained the designation of Volkswagen's power batteries in China and overseas markets, which marks that the company's products have passed the test of Volkswagen and officially obtained the license letter for mass production. We believe that the cooperation between the company and Volkswagen is about to enter a sweet harvest period.
2) Globalization: The development prospects of overseas markets are broad, and the company's overseas progress is ahead From the perspective of penetration, the penetration rate of new energy vehicles in China will exceed 30% in 2023, while the penetration rate in Europe will just exceed 20%, and the penetration rate in the United States and Thailand will be around 10%. The overseas market is in the embryonic stage of industry growth and has great potential for development. Gotion Hi-Tech is one of the few battery companies in China that has made progress in the United States, and has planned lithium battery and cathode and anode material production projects in Illinois and Michigan respectively. In Göttingen, Germany, the company will roll off the production line of its first German-made battery product in 2023. In Southeast Asia, the first phase of 2GWh production capacity in Thailand is planned, and the supply is expected to start in 2024Q1; In the Vietnamese market, it has jointly built a lithium iron phosphate battery plant with a local vines company.
3) New technology products: Innovation-driven, next-generation battery products create more possibilitiesThe company's R&D investment has remained high over the years, with R&D investment of about 1.8 billion yuan in 2022, a year-on-year increase of 178%. R&D investment has been further strengthened, and new product technology innovation has been vigorously carried out. The new products include: ternary semi-solid-state battery with an energy density of up to 360Wh kg and a range of 1000km; Qichen L600LMFP battery cell can achieve a mass energy density of 240Wh kg and support 18 minutes of fast charging.
Earnings** and valuations.
In 2023-2025, we expect the company to achieve an operating income of 31449/402.88/520.9.2 billion yuan, a year-on-year increase of 3643%/28.11%/29.30%；It is expected to achieve a net profit attributable to the parent company of 1016/18.23/27.6.4 billion yuan, a year-on-year increase of 22592%/79.48%/51.65%;The corresponding PE valuation is 3234/18.02/11.88 times, first coverage, giving an "overweight" rating.
Risk warning: downstream demand is less than expected. Raw material fluctuation risk. Market competition intensifies the risk. Risk of domestic and foreign policy changes. The risk that the company's cooperative relationship with downstream customers is less than expected.
*According to the calculation of the research report data released in the past three years, the research team of Mei Yun of Great Wall has conducted in-depth research on the stock, and the average accuracy of the past three years is 7895%, and its ** attributable net profit in 2023 is 96.3 billion, 34 per cent based on the current price4。
The latest profit** breakdown is as follows:
A total of 8 institutions have rated the stock in the last 90 days, ** 6 have rated and 2 have overweight ratings; The average institutional price target over the last 90 days is 3185。
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