Dongwu Securities Co., Ltd.Zeng Duohong, Ruan Qiaoyan, Yue Siyao recently conducted research on Dangsheng Technology and released a research report "Comment on the third quarter report of 2022: Q3 performance meets expectations, single ton profit remains stable". This report gave Dangsheng Technology buy rating , believing that its target price is 108.00 yuan, the current stock price is 65.78 yuan, and the expected increase is 64.18%.
Dangsheng Technology (300073)
Investment Points
Q3 2022 The company achieved a net profit attributable to shareholders of RMB 566 million, an increase of 7.74%, and its performance in line with expectations. The company's revenue in the first three quarters of 2022 was 14.087 billion yuan, an increase of 172% year-on-year; net profit attributable to shareholders was 1.478 billion yuan, an increase of 103% year-on-year. 22Q3 revenue was 4.974 billion yuan, an increase of 128% year-on-year, a decrease of 5.6%; net profit attributable to shareholders was 566 million yuan, an increase of 102% year-on-year, an increase of 8%; net profit attributable to shareholders was 673 million yuan, an increase of 202% year-on-year, an increase of 8%, and performance in line with expectations.
Company shipped 16,000-17,000 tons in Q3, an increase of about 10%. We expect Q4 shipments to continue to increase. We expect the company to ship 16,000 tonnes in Q3, an increase of about 10% month-on-month, mainly affected by power restrictions, and the cumulative shipments of about 46,000 tonnes in the first three quarters, an increase of 50% year-on-year. Q4 production continues to rise. We expect shipments to increase by 25%+, and the annual shipments are expected to reach nearly 70,000 tons, an increase of about 50%. Looking at next year, the 50,000 tons of high nickel ternary production capacity of Changzhou Phase II has been gradually put into production. We expect shipments to maintain a growth of 50%+ in 23 years.
Company Q3 profit of deducting non-recurring items per ton remains at around 39,000/ton, and we expect Q4 to gradually return to normal levels. In terms of profit, we estimate that the company's Q3 profit excluding non-recurring items was 39,000/ton+, which was the same month-on-month. Among them, we expect that the foreign exchange profit and loss contribute about 200 million yuan, and the company's non-recurring profits of forward exchange settlement due and fair value changes in are expected to be 100 million yuan+ (investment income and fair value changes in profit and loss totaling -128 million yuan, of which the Zhongke Electric fair value changes are expected to be 0.2 million yuan+). If the impact of exchange rate fluctuations is not included, we estimate that the company's Q3 net profit is expected to reach about 30,000-35,000/ton, which is still at a relatively high level. As the proportion of high-nickel products and overseas customers continues to increase, and the exchange gains and losses decrease, we expect that the profit of deducting non-recurring items will remain around 35,000/ton in Q4, and we expect that the profit per ton will remain 34,000-35,000/ton in the whole year. In the long run, the company plans to expand the precursor to a production capacity of 15,000 tons, and improve the self-supply rate to ensure profitability. We expect that a single ton profit will gradually return to around 25,000-25,000/ton in 23 years. At the same time, the company used the cooperation method of Huayou and Zhongwei to lock in upstream low-priced nickel and deploy battery recycling, and worked with Zhongwei and Sichuan Road and Bridge to deploy iron lithium to expand new profit growth points.
Profit Forecast and Investment Rating: We maintain the company's forecast of 2.256/2736/3.321 billion yuan in 2022-2024, a year-on-year increase of 107%/+21%/+21%, corresponding to PE of 14x/12x/10x. Considering the company's high overseas shipment share and the profit level remains high, we give 20xPE in 2023, with a target price of 108 yuan, and maintain a "buy" rating.
Risk warning: Electric vehicle sales are lower than expected, upstream raw material prices fluctuate significantly
Securities Star Data Center calculates based on the research report data released in the past three years, Debang Securities Peng Guangchun's research team has conducted in-depth research on the stock, with the average prediction accuracy in the past three years as high as 81.3%. It predicts that the attributable net profit in 2022 will be 1.58 billion yuan, and the predicted PE based on the current price conversion is 21.08.
latest profit forecast details are as follows:
A total of 21 institutions in this stock have given ratings in the past 90 days, 18 buy ratings and 3 increase holdings; the average target price of institutions in the past 90 days was 112.58. According to the financial report data in the past five years, Securities Star valuation analysis tool shows that Dangsheng Technology (300073) has excellent competitive moat, average profitability, and poor revenue growth. Financial health is relatively healthy, and financial indicators that need to be paid attention to include: accounts receivable/profit margin. The stock has a good company index of 3.5 stars, a good price index of 2.5 stars, and a comprehensive index of 3 stars. (Indicators are for reference only, indicator range: 0 ~ 5 stars, maximum 5 stars)
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