Thanks to the continued recovery in demand, the price of 6F increased for the first time in more than four months. According to third-party platform data, the average domestic 6F price on July 1 has risen to 250,000 yuan/ton, an increase of 5,000 yuan/ton from the previous day, which is the first price increase after more than four months of decline. On the one hand, the price of has been close to the break-even line of many second-tier 6F manufacturers, and many manufacturers have reduced or even stopped production; more importantly, after demand continued to pick up in June, the supply and demand situation began to reverse.
Picture: 6F’s first price increase in more than four months
Data source: Wind
We believe that with the explosion of demand in the second half of the year and the limited new production capacity of 6F, the supply and demand situation in the industry will become tight, regardless of the price fluctuations of raw materials such as lithium carbonate. expects that there will still be room for price increases in 6F in the second half of the year, and the profitability of various manufacturers will rise. Many customers have renewed their 6F long-term contracts in June, which also reflects the industry’s expectations for tight supply and demand in the second half of the year.
On the supply side, the industry's new production capacity in the second half of the year is limited, mainly the 90,000 tons of liquid 6F production capacity Tianci put into production in the middle of the year. We estimate that the global 6F effective production capacity in 22Q3/Q4 will be 37,000 tons/45,000 tons respectively.
Table: It is estimated that the global 6F effective production capacity in 22Q3/Q4 will be 3.7/45,000 tons respectively
Data source: Wind, Gaogong Lithium Battery
Demand side, benefits from the launch of a large number of new models, and the continued improvement of the electric model matrix, thereby driving terminal demand outbreak, we have raised the domestic electric vehicle sales volume in 2022 to 6.5 million units+ (for details, please see: https://mp.weixin.qq.com/s/LvbtgH8gEC4zl8ZLif3O0w), of which Q3/Q4 were 1.83 million units+/2.16 million units respectively. vehicle+. The corresponding demand for 6F is 32,000/39,000 tons respectively. We estimate that the global 6F demand/supply in 22Q2-Q4 will be 83%/88%/86% respectively, and the industry supply and demand situation will become tight in the second half of the year.
Picture: We expect that the supply and demand situation in the industry will become tight in 22Q3-Q4
Data source: Wind, Gaogong Lithium Battery
Picture: It is expected that the profit per ton based on the 6F bulk unit price will rebound in 22H2 (10,000 yuan/ton)
Data source: Wind, Gaogong Lithium Battery
Looking forward to 23-24 years, the supply and demand situation of 6F will worsen, but Tianci will rely on the industry-leading liquid 6F process (with obvious advantages in yield, unit investment, and energy consumption) and a complete layout on the raw material side. , has always been on the far left side of the 6F cost curve. It is expected that the profit per ton in 23-24 will be 37,000 yuan/30,000 yuan, and the basic market is still solid.
More importantly, Tianci has gradually grown into a new materials platform company based on the underlying technology and large chemical system to continue to expand its business territory. This logic is gradually being verified. The new businesses previously cultivated by (LIFSI, additives, recycling, iron phosphate, binders, other new fluorine chemicals, etc.) will usher in explosive growth. conservatively predicts that the new business segment will contribute 4 billion yuan in profits in 23 years. The company seems to be a cyclical stock, but in fact it has continuous growth momentum and is expected to realize its performance quarter by quarter. The valuation system will gradually switch from the previous cyclical products to growth. It is conservatively estimated that the net profit attributable to the parent company in 22-24 will be 60/70/8.2 billion yuan, corresponding to a P/E of 20/17/15 times. We continue to recommend it.
