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Producer/Analyst: Li Lujing of Tianfeng Securities
1.1. Taking advantage of the spring breeze of new energy, lithium battery equipment Leading in China
Leading in China in lithium battery equipment.
The company was established in 2014 and is mainly engaged in the research and development, production and sales of intelligent manufacturing equipment. Its products cover lithium batteries, auto parts, precision electronics, security, rail transit and other industries.
While the company is deeply involved in the lithium battery industry, it is actively exploring high-quality customers in the automotive parts, precision electronics, rail transit, and security industries to enhance its position in the intelligent manufacturing equipment industry.
The company is one of the leading companies in the lithium battery manufacturing equipment industry. The company is one of the few manufacturers capable of R&D and manufacturing of intelligent complete equipment for power battery cell assembly, battery module assembly and box Pack. The overall technology of the prismatic power battery cell assembly line is also at the internationally advanced level.
With its technological advantages, the company has established long-term and stable cooperative relationships with well-known manufacturers such as New Energy Technology, CATL, BYD, Lishen, AVIC Lithium Battery, and Sunwanda.
In the automotive parts, precision electronics, security, rail transit and other industries, the company actively develops high-quality customers and has established stable cooperation with well-known enterprises in downstream industries such as Aisin Seiki, Multimatic, Lingyun Co., Ltd. relation.
The company has developed and produced automobile front roll parts production workshop. The equipment has been exported and applied to German local roll parts factories. It is a successful case of domestic intelligent equipment entering developed countries.
The product series is gradually enriched and the coverage is continuously broadened.
The company’s lithium battery special machine product types continue to increase, basically covering all the middle and rear process stages of lithium batteries; the company continues to develop a complete line of automotive parts and components, and has completed the upgrade of the digital workshop in terms of bodywork.
At the same time, the company's R&D accumulation of key technologies has led to the continuous improvement of key technical indicators, and gradually realized the R&D and production of complete line products in the fields of precision electronics, security, rail transit and medical health.
Figure 2: History of the company’s product evolution
1.2. Revenue continues to rise, and performance in 2021H1 is outstanding
From 2016 to 2021H1, lithium battery manufacturing equipment business Promote the rapid expansion of the company's revenue/net profit. Li Yuanheng achieved operating income/net profit of 1.430 billion/140 million in 2020, a year-on-year increase of 60.87%/50.89%. From 2016 to 2020, the company's operating income grew rapidly, CAGR +58.08%, mainly due to the rapid growth of lithium battery manufacturing equipment business income. From 2016 to 2020, the company's net profit attributable to the parent company was CAGR +82.72%.
At the same time, Li Yuanheng’s performance in 2021H1 was outstanding. The company's operating income/net profit in 2021H1 was 1.047 billion/99 million, a year-on-year increase of 108.41%/998.63%.
In the context of rapid revenue growth, the profit margin has slightly decreased relative to the profit growth rate. In 2020, the company's gross profit margin/net profit margin was 38.33%/9.82%, a year-on-year increase of -1.34/-0.65pct.
The company’s main business is divided into two major sectors: intelligent manufacturing equipment and accessories and services.
The intelligent manufacturing equipment business includes lithium battery manufacturing equipment, auto parts manufacturing equipment and manufacturing equipment in other fields; manufacturing equipment in other fields mainly include laptop computer assembly lines, server assembly workshops, and fully automatic mask production lines that the company actively develops. Waiting for new products. The smart manufacturing equipment business may still be the company's main source of growth.
As the core business of the company's intelligent manufacturing equipment, the lithium battery manufacturing equipment business has revenue of 1.189 billion yuan in 2020, a year-on-year increase of 53.16%, accounting for 84.03% of the company's main business.
The accessories and service business has a compound annual growth rate of 65.19% from 2018 to 2020, but the overall volume is small, and its revenue proportion in 2020 will not exceed 5%.
In the short term, we expect that the smart manufacturing equipment business may still be the company's main source of growth. Driven by the rapid growth of the smart manufacturing equipment business, related accessories, value-added and service businesses are also expected to expand rapidly.
1.3. The company’s equity structure is stable, and the founder has a technical background.
The actual controller *** holds 51.42% of the shares, and the equity is relatively concentrated. Zhou Junxiong indirectly controls 45.57% of the company's shares through Li Yuanheng Investment, and indirectly controls 3.17% of the company's shares through Hongbang Investment. His spouse Lu Jiahong directly holds 2.68% of the company's shares. Zhou Junxiong and Lu Jiahong hold a total of 51.42% of the company's shares, which is The actual controller of the company.
Zhou Junxiong has a technical background and has rich industry experience. In 2019, he was awarded the Guangdong Provincial Science and Technology Entrepreneurship Leading Talent. He was the main implementer of the "Key Technology and Industrialization of Power Battery Core Manufacturing Equipment" project declared Evaluation of the 2019 Guangdong Science and Technology Progress Award, with the blessing of an outstanding executive team, the company's future development is promising.
1.4. The completion of the fund-raising project will further enhance the company’s market competitiveness
After deducting issuance expenses, the company plans to invest in industrial robot intelligent equipment production projects and industrial robot intelligent equipment R&D centers. project, and supplement the company's liquidity needs, with a total project investment of 795.1311 million yuan.
The industrial robot intelligent equipment production project is an expansion of the company's existing business capacity. It aims to introduce advanced automated production equipment and systems and build on the company's existing production and research and development technology through new project investment and construction. Expand the company's production capacity, reduce product costs, and enhance the market competitiveness of the company's products.
The industrial robot intelligent equipment R&D center project will make the quality and cost of the company's products more competitive. The research and development of new technologies aims to use laser technology, intelligent control technology, human-machine collaboration technology, etc. Research and develop and achieve breakthroughs to make the quality and cost of the company's products more competitive.
2.1. Electric vehicles: Car companies are actively promoting the development of electric vehicles, and the demand for lithium batteries continues to rise.
The penetration rate of electric vehicles among car companies has increased significantly. According to our calculations, major car companies have significantly improved the penetration of electric vehicles in 2020 compared to 2019. Represented by Volkswagen, BMW, Daimler, etc., the electrification progress of individual companies is relatively slow.
Car companies have jointly launched a wave of electrification development, and the demand for lithium batteries is expected to reach more than 800GWH by 2025.
According to the electric vehicle plans of Volkswagen, BMW, Daimler, Toyota, Hyundai and other companies, we estimate that global demand for electric vehicles will reach 15.68 million units by 2025, with penetration of the automobile market reaching 17% that year. .
The strong demand for electric vehicles is expected to drive a total demand for lithium batteries of about 809GWH, of which pure electric demand is about 747GWH and hybrid demand is about 62GWH.
2.2. Forklifts and power tools: The demand for lithium batteries is also strong
Forklifts are another demand for power batteries. According to the white paper on the development of China's electric forklift industry, by 2020, the degree of electrification of forklifts in my country will reach 51.27%, of which the penetration rate of lithium battery forklifts is about 39.30%.
Assuming that the compound growth rate of the forklift industry is 10% in the next five years and the penetration of lithium battery forklifts increases to 60%, we estimate that the demand for lithium batteries in the forklift field will reach about 37GWH.
The demand for lithium batteries for power tools is growing rapidly.
Power tools are showing a major trend of cordless + lithium batteries. We estimate that the demand for lithium batteries for power tools will reach 17.76GWH by 2025.
2.3. Energy storage: Lithium battery cost reduction + subsidies drive rapid release of energy storage market demand
Relevant energy storage subsidy policies in various places are continuously introduced, driving energy storage market demand.
As more and more regions begin to introduce subsidies for energy storage projects, we believe that the energy storage market has great potential and is expected to become the next important growth level of lithium batteries.
2.4. The power battery market has vast space, but there is still a large gap in production capacity
The demand for power lithium batteries is not only driven by electric vehicles, but its growth drivers also include engineering machinery + power tools + Energy storage + two-wheelers, etc., assuming a capacity utilization rate of 65%, we estimate that the overall demand for power lithium batteries is expected to reach 1,714GWH by 2025.
If lithium battery manufacturers can achieve 100% capacity utilization, they will need 1114GWH. However, battery manufacturers often cannot achieve 100% capacity utilization. The main reasons for this are:
1) The battery production line takes a long time to switch between different batteries;
2) Battery manufacturers generally expand production in advance, so the current year's production capacity will not 100% match the current year's demand, and the general production capacity will be too large;
3) A large number of battery production lines are under continuous debugging and updating;
4) The battery industry is still attracting new entrants to join the competition, especially European and American manufacturers. The dilemma remains.
Judging from the proportion of the production capacity of the world's leading companies in the overall lithium battery shipments in recent years, there is still a large gap in the current supply side based on the demand side.
3.1. Leading the industry in R&D investment and strong ability to transform scientific and technological achievements
The company’s products cover the application layer and execution layer. Based on the company's understanding of downstream industry processes and continuous investment in technology research and development, the company independently developed software, systems, integrated sensor technology, machine vision technology, robotics technology, intelligent control technology, software technology, laser technology and other advanced technologies to provide downstream industry customers Customize and develop intelligent manufacturing solutions to help and promote the improvement of intelligent manufacturing levels in downstream manufacturing industries.
Figure 9: The company’s product coverage
The proportion of R&D investment is higher than that of industry competitors.
The company focuses on intelligent manufacturing equipment technology research and development, process development, product design, etc., placing R&D accumulation and technological innovation in the first place in corporate development.
In the field of lithium batteries, the company’s three-layer fully-automatic hot and cold pressure formation capacity testing machine and prismatic power battery cell assembly line’s overall technology are at the internationally advanced level; the company’s phaser fully-automatic assembly and testing line’s overall technology is at the domestic advanced level. , some indicators have reached the international advanced level.
The company has the same R&D model as comparable companies in the same industry, and its R&D investment accounts for a relatively high proportion of operating income. The comparison with the R&D expense rate of the same industry is as follows:
R&D investment has yielded results, and the company has strong technical reserves.
The company has mastered the cutting-edge and core technologies in the industry, including imaging detection, integrated control, intelligent decision-making, laser processing, flexible assembly, digital twins and other core technologies.
As of April 1, 2021, the company has 700 patents. These technologies provide the basis for the company's specific application of assembly equipment, assembly equipment, welding equipment, and testing equipment in intelligent manufacturing equipment. The scientific and technological achievements have been deeply integrated with customers in different industries and cross-fields, and the market response has been good.
The company’s scientific and technological achievements are ultimately represented by standardized or personalized complete sets of automation equipment in different application fields. Its scientific and technological level reflects the advanced production technology in the field of lithium batteries, automobile parts and other fields.
At present, Li Yuanheng's scientific and technological achievements involve a number of processes. It has extensive in-depth research on processes, has the planning, design and implementation capabilities of overall solutions, and is deeply integrated with customers in different industries and cross-fields. The company's product market reflects It is good and has achieved certain economic and social benefits.
3.2. In-depth integration with downstream lithium battery leaders, corporate development is stable and sustainable
In the field of global consumption of soft-pack lithium batteries, the shipment volume of new energy technology continues to account for global shipments More than 30%.
According to Japan's B3 report, global soft-pack consumer lithium battery shipments increased by 2.671 billion units from 2014 to 2020. During the same period, new energy technology shipments increased by 930 million units, accounting for more than 35.16% of the global increase.
New energy technology equipment procurement scale is large, but the company's business scale is relatively small. The company mainly provides equipment for new energy technology, and the largest customer accounts for a relatively high proportion of revenue. In the field of China's power lithium battery, in the past three years, the company's top five customers, CATL, BYD, Lishen and AVIC, have accounted for more than 60% of the total installed capacity, with a high degree of concentration; China's power lithium battery installed capacity has increased from 56.90Gwh To 64Gwh, an increase of 7.1Gwh, the installed capacity of these four customers increased by 8Gwh, exceeding the overall increase in the industry during the same period.
New Energy Technology is a leading company in consumer lithium batteries, especially soft-pack consumer lithium batteries. In the past three years, its shipments have ranked first in the world, and its market share has continued to exceed 30%.
According to the "List of Top 100 Companies in China's Battery Industry in 2019", the operating income of Ningde New Energy Technology Co., Ltd. and Dongguan New Energy Technology Co., Ltd. were 28.806 billion yuan and 12.556 billion yuan respectively, totaling 41.363 billion yuan. It is the consumer lithium battery company with the largest operating revenue on the list.
Equipment companies are deeply bound to downstream lithium battery leaders and grow together.
Due to the important impact of equipment on the yield rate of battery products and the customized features of equipment, equipment manufacturers have to go through multiple links and long-term certification. The certification cost is high, and lithium battery manufacturers will not easily replace the main equipment. equipment manufacturer.
After long-term problem feedback and detail refinement, the production equipment has formed equipment solutions under the technical path of corresponding downstream battery manufacturers, and has the ability to manufacture and develop equipment with higher requirements.
The company has a long history of cooperation with new energy technology, which is stable and sustainable. With its excellent product quality, continuous technological improvement, and excellent process indicators, the company has been the same as other equipment manufacturers from the beginning. to compete with each other and gradually enhance its position in the new energy technology supply chain.
The company sells products to New Energy Technology mainly for battery cell testing equipment and battery assembly equipment. In November 2018, the company signed a strategic cooperation agreement with New Energy Technology Equipment, which is valid for three years.
As of May 11, 2021, the company’s orders on hand for new energy technology are approximately 1.975 billion yuan (tax included). The company's cooperation with New Energy Technology is stable and sustainable.
3.3. The capacity utilization rate has steadily increased, and the production and sales rate of core lithium battery products has gradually recovered.
The company's product capacity utilization rate has steadily increased and has always remained at a high level. The company's products are all customized equipment, and the size, process technology difficulty, and number of parts among different equipment vary greatly. The company's capacity utilization cannot be measured based on the number of units of the product.
The company's site area and number of designers are sufficient. The number of working hours of the company's own assembly and debugging personnel does not reflect the company's production capacity. Therefore, the assembly and debugging personnel utilization rate is used to reflect the company's production capacity utilization.
The company’s assembly and debugging personnel utilization rates from 2018 to 2020 were 118.04%, 126.08% and 124.30% respectively. From 2018 to 2019, with the growth of business, the utilization rate of the company's own assembly and debugging personnel continued to increase. In 2020, the utilization rate of the company's own assembly and debugging personnel was the same as in 2019.
The lithium battery business is the core business of the company. In recent years, the demand for intelligent manufacturing in downstream industries has been growing, which is mainly reflected in the rising technical indicators, the shift from automation to intelligence, and the shift from special machines to complete lines and digital workshops. development trends.
In line with the development trend of the industry, the technical indicators such as production capacity and flexibility of the company's products continue to increase significantly, and with the launch and replacement of complete lines and digital workshop products, the number of special machines integrated into a single complete line continues to increase.
From 2018 to 2020, the production and sales rates of the company's lithium battery special aircraft products were 118.26%, 85.06% and 94.30% respectively; the production and sales rates of the lithium battery complete line products were 85.71%, 50.00% and 142.86% respectively. . After technical adjustments and updates, the production and sales rate in this field has gradually recovered.
3.4. Achieve cross-field applications and provide professional solutions for multiple downstream industries
Enterprises in the industry mostly focus on customized equipment for part of the production links of a certain downstream industry, and it is difficult to Mass copy production across industries. The company has experience in non-standard customized projects in multiple application fields, and is committed to accumulating standardized technologies that can be applied in different downstream industries, thus having cross-field application advantages.
By decomposing equipment experience in different fields into different process platforms, the company gradually precipitated the process platform into a standardized platform. On the basis of the standardized process platform, the company further transformed the internal technology modules into common technologies to achieve Flexible application of the same technology or module in different downstream fields.
Figure 16: The company’s multi-industry solutions
Currently, the company has 15 process platforms. With the increase in future application projects, the company’s precipitated process applications will further increase. Different downstream industries have more specialized advantages when providing solutions.
3.5. Start a new journey of lithium-ion digital intelligence with Haikui Intelligent Manufacturing
Haikui Intelligent Manufacturing is a company based on customer service in terms of technology, manufacturing, quality, cost, management, etc. A set of "digital intelligent whole-line solutions" suitable for the lithium battery industry was developed based on a deep understanding of the pain points and forward-looking considerations in the direction of intelligent manufacturing. Haikui Intelligent Manufacturing consists of two parts: "visible wisdom" intelligent equipment and "invisible wisdom" software systems.
"Visible wisdom" is based on equipment automation, opening up the industrial network design behind it, and opening up manufacturing operations through data collection and data analysis to real-time monitoring, intelligent production scheduling, and equipment predictive maintenance. Maintain the digital barriers of enterprise management, improve the rationality, controllability and adaptability of the production process, improve the efficient allocation of production resources by enterprises, and achieve lean production.
"Invisible wisdom" is based on the factory Internet interconnection platform, factory layout and production line design system, optimizing operation processes and management strategies, and ensuring R&D and process system management.
Through the interconnection design of man, machine, material, law and environment, we provide corporate management with long-term development direction and blueprint planning.
Figure 18: Schematic diagram of lithium battery factory data collection
Haikui Intelligent Manufacturing adopts the DIM data direct collection method to realize the direct collection of on-site equipment layer data by the MES system, breaking the low timeliness and inconvenience Comprehensive stubborn diseases, achieving accurate and high-speed collection of on-site data;
Penetrating into the entire process of lithium battery production, the digital software system matching Li Yuanheng's intelligent manufacturing equipment is directly integrated from the bottom of the equipment, in accordance with the lithium battery The production process flow collects data so that it can be quickly traced back, problems discovered and judged, and optimal solutions intelligently recommended.
At the same time, the company has built interconnected industrial Ethernet and power battery industrial information network technology standards as the basis for digital transformation, integrating data from the group management system and other related systems, and can set Data transmission direction, upload or download data synchronization method, synchronization cycle and other related parameters.
The company's current main business can be divided into the lithium battery field, the automotive field, other fields and the corresponding accessories and service businesses. We make estimates based on the company's business layout and historical performance:
1) Lithium battery manufacturing equipment: The company's lithium battery business can be divided into consumer lithium batteries and power batteries.
(1) Consumer lithium battery: The major downstream customer of consumer lithium battery is ATL. In recent years, the consumer lithium battery business has accounted for more than 70% of the company’s total lithium battery business, and the proportion is still rising, mainly because the company’s products are targeting The entire production process of lithium batteries is penetrated, extending from the battery cell testing process to the battery cell manufacturing and battery assembly processes. The battery cell assembly machine has become a new growth point for the company.
(2) Power batteries: The downstream customers of the company’s power battery business include Lishen, BYD, CATL and other leading battery manufacturers. According to the previous description, power batteries have ushered in a new round of expansion, and the company is currently The power battery business is relatively small and is expected to grow significantly in the next few years.
Based on the company’s orders on hand, as of August 25, the order amount of consumer lithium batteries on hand was 1.770 billion yuan (including tax), and the order amount of power lithium batteries on hand was 2.784 billion yuan (including tax). Tax), we predict that from 21 to 23, this business will grow at a rapid rate, with corresponding revenue of 2.177 billion yuan, 4.037 billion yuan, and 6.200 billion yuan respectively.
2) Auto parts manufacturing equipment:
The company’s business in this area is relatively small, and the overall trend is stable. The company has not invested too much in research and development in this business. In recent years, the completion of fixed asset investment in the automobile manufacturing industry has slowed down.
It is expected that from 21 to 23, the automotive field business will maintain a slight growth rate of 10%, with corresponding revenue of 0.32, 0.35, and 39 million yuan respectively.
3) Accessories and service business:
This business brings value-added income to the company’s other businesses. Combined with the company’s overall compound growth rate in recent years, it is expected to maintain growth in 21-23 years A growth rate of 45% corresponds to revenue of 0.71, 104, and 150 million yuan respectively.
4) Manufacturing equipment and other businesses in other fields:
This business will have a relatively obvious growth in 2020, mainly because the company has expanded precision electronics (laptop computer assembly lines, etc. ) and new products in the medical field (mask machine). As the epidemic is gradually brought under control, the company may have a short-term correction.
It is estimated that in 21-23, the corresponding revenue will total 0.91, 0.99, and 109 million yuan respectively. Based on this, the company's operating income in 2021-2023 is expected to be 2.371 billion, 4.275 billion, and 6.498 billion respectively, with a YOY of 6.582 %, 80.30%, 51.99%; net profits attributable to the parent company were 223 million, 455 million, and 883 million respectively, and YOY were 59.10%, 103.67%, and 94.09%, corresponding to PE 119X, 59X, and 30X.
Based on the company’s main products, we selected Pioneer Intelligence, Hangke Technology, Yinghe Technology and Kerui Technology, which are also lithium battery equipment companies, as comparable companies. The average PE of comparable companies in 2021 is 62.53X .
The company’s core competitiveness in this industry has chosen 38.06X as the target valuation in 2022. As of September 8, 2021, the target market value is 33.423 billion yuan, with an upside potential of 24.53%, corresponding to the target The price is 379.80 yuan.
1) The risk of slowdown or decline in the growth rate of the lithium battery industry.
The company is mainly engaged in the research and development, production and sales of intelligent manufacturing equipment, providing high-end equipment and factory automation solutions for lithium batteries, auto parts, precision electronics, security, rail transit and other industries.
The company’s main business income mainly comes from equipment in the lithium battery field, with sales revenue of 604.1889 million yuan, 776.5668 million yuan and 1.1893997 million yuan respectively, accounting for 90.01%, 87.46% and 84.03%.
In the future, if the growth rate of the lithium battery industry slows down or declines, and the company cannot expand its business in other industries, the company will be at risk of slowing down revenue growth or even declining revenue.
2) The risk of high customer concentration.
The sales revenue of the company’s top five customers (including enterprises under common control) accounted for 93.91%, 95.79% and 86.42% of operating revenue respectively. The company’s customer concentration is high, among which the new customers of the company’s largest customer Energy technology sales revenue accounted for 67.39%, 74.44% and 70.28% of operating revenue respectively.
If individual or some major customers experience reduced market demand and operational difficulties due to industrial policies, industry reshuffles, emergencies, etc., it will have an adverse impact on the company's normal operations and profitability;
If the company's future products cannot continue to be recognized by relevant customers, or cannot maintain an advantage in the market competition process, the company's operations will be adversely affected.
3) Risk of performance decline.
In the past three years, the company's operating income was 671.6028 million yuan, 888.8969 million yuan and 1.4299652 million yuan respectively, and the net profits after deducting non-recurring gains and losses were 119.7952 million yuan, 75.1577 million yuan and 124.6134 million yuan respectively. .
In 2019, net profit after non-deductions has declined. The main reason is that R&D expenses have increased significantly. Secondly, administrative expenses and sales expenses have also increased. In the future, if the company's income cannot maintain sustained growth, or expenses The growth rate continues to be greater than the growth rate of revenue, which may lead to the risk of slowdown or even decline in the company's operating performance.
4) Risk of stock price fluctuations in the short term.
This stock is a sub-new stock with a small amount of circulating capital, and there is a risk of significant stock price fluctuations in the short term.
5) The calculation is subjective and is for reference only.
The report involves a large number of calculations and sensitive calculations, and the results are for reference only.
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