CATL(300750)：ACCELERATED ROLL-OUTS IN LITHIUM INDUSTRIAL CHAIN TO LOCK SUPPLY OF KEY MATERIALS

机构：兴业证券
研究员：WANG Shuai

　　Company Profile
　　Contemporary Amperex Technology Co., Ltd. is a China-based supplier of power battery systems. The Company is primarily engaged in the research, development, manufacture and sales of new energy vehicle power battery systems and energy storage systems. The Company's main products include power battery systems, energy storage systems and lithium battery materials. The Company's products are mainly used in the fields of electric passenger cars, electric buses and special vehicles, such as electric logistics cars.
　　Investment Highlights
　　Contemporary Amperex Technology Co., Ltd. (CATL/ the company) rolled out business globally in lithium resources, ensuring supply of crude ores.
　　CATL has actively invested in overseas mining industry, built solid ties with tyeeli, and strategically rolled out business in Yichun, a city in Jiangxi Province, and Sichuan to ensure the supply of lithium concentrates.
　　Tyeeli proactively inked multiple exclusive sales agreements to lock lithium concentrates of roughly 540,000~570,000 tons in 2023, and AVZ and GL1 are expected to contribute more increments to meet its expansion demand.
　　In addition, with the exploitation and production capacity expansion of lithium ores in Yichun and Sichuan, the company is expected to enhance its self-sufficiency rate of crude ores.
　　CATL has invested multiple lithium salt factories, lifting its self-sufficient proportion of lithium carbonates and strengthening its control over profitability.
　　In 2021, the company made frequent investments to establish joint ventures with enterprises including CANMAX, YONG XING MATERIALS and ZHICUN Lithium and inked strategic collaboration agreement to ensure the self-sufficient supply of lithium carbonates.
　　Both the collaboration enterprises and joint ventures have stable supply of lithium concentrates in volumes and prices. With the construction and operation of the production lines, the company is expected to steadily enhance its self-sufficient proportion of lithium carbonates, further consolidating its control over profitability.
　　CATL established close cooperation with multiple mainstream manufacturers of cathodes, less dependent on a sole supplier.
　　In terms of lithium iron cathodes, the company has built solid and long-term supply relationship with multiple manufacturers of cathodes; as for ternary cathode materials, during 2022~2025, RONBAY TECHNOLOGY will be the first supplier of the company’s ternary cathode materials, and in 2022, the company will buy nickelic ternary of 100,000 tons in 2022. In addition, the company also boasts several suppliers of ternary cathode materials such as Guizhou Zhenhua E-chem Inc., Hunan Changyuan Lico Co., Ltd. and LIBODE.
　　Earnings forecast and investment recommendation
CATL has accelerated to roll out business in lithium resources in a bid to lock supply of key raw materials. Thanks to the vertical business roll-outs from lithium ores to lithium salts to cathode materials, the company’s stability in supply side is guaranteed, further recovering its control over profitability.
　　With the performance pressure in Q122, we revised down the full-year expectations and estimated its net income attributable to shareholders to CNY 23.21 billion in 2022, CNY 36.72 billion in 2023, and CNY 47.32 billion in 2024, implying a P/E ratio to be 41.7x, 26.3x, and 20.4x, based on the closing price on May 13th at CNY 414.80. Reiterate “Buy”.
　　Potential risks
　　Less-than-expected appetite for new energy vehicles; more-than-expected price hikes of raw materials; slower-than-expected production capacity expansion; lessened overseas orders due to international political tensions