The new energy business is booming. GEM (002340.SZ) doubled its profit last year, but it was far lower than institutional expectations.
On the evening of January 27, GEM disclosed its annual performance forecast. The company expects to achieve a net profit attributable to shareholders of listed companies of 866 million yuan to 990 million yuan in 2021, an increase of 110% to 140% over the same period last year. ; Achieved net profit after deducting non-recurring gains and losses of RMB 656 million to RMB 800 million, an increase of 87.18% to 128.18% over the same period last year.
Regarding the reasons for the change in performance, GEM said that in 2020, the company's core base was located in the hardest-hit area of ??Hubei's new crown epidemic, and various production and operations were severely affected; in 2021, the company quickly launched the "Jingmen + Taixing + Fu'an" The main construction of the ternary precursor manufacturing base with two auxiliaries will form a total annual production capacity of more than 230,000 tons of ternary precursors by the end of the year, ensuring the company's production capacity needs for the growth of the ternary precursor market; the company's core business production capacity has been fully released, and sales have increased significantly. , driving the company's sales and performance to grow significantly.
In addition, the company estimates that non-recurring gains and losses in 2021 will have an impact on the company's net profit attributable to shareholders of approximately 190 million to 210 million yuan. The main influencing factor is the company's reduction of its holdings in Zhuzhou Oukeyi CNC Precision Tools Co., Ltd. Limited companies generate investment income and receive government subsidies.
In the first three quarters of last year, GEM’s net profit after deductions for non-profits was 664 million yuan. Based on this calculation, the company’s net profit after deductions for non-profits in the fourth quarter was -08 million yuan to 136 million yuan, compared with the third quarter , fell at least 19% month-on-month or turned from profit to loss.
GEM’s full-year results were significantly lower than agency expectations. Jiemian News found that CITIC Securities, Minsheng Securities, and Everbright Securities all gave forecasts for the company's 2021 earnings in previous research reports. Among them, Minsheng Securities and Everbright Securities estimate the company's net profit last year to be 1.254 billion yuan and 1.253 billion yuan; CITIC Securities has lowered the company's 2021 net profit forecast to 10.40, taking into account the rising prices of acid and alkali raw materials, the epidemic in major production bases and the impact of dual control. billion. The average profit forecast by the above-mentioned institutions is 1.18 billion yuan. Based on the company's average forecast net profit, GEM's profit last year was 250 million yuan less than expected.
GEM has two major businesses: new energy battery materials and comprehensive utilization of waste resources. Among them, new energy battery materials have become the company’s largest core business. In 2019 and 2020, the company's new energy battery materials business revenue accounted for 62% and 54%, and by the first half of 2021, this business accounted for 70%.
Broken down, GEM’s new energy battery materials business is divided into ternary precursors, cobalt tetraoxide and power battery recycling business. Among them, ternary precursors and cobalt tetroxide are the main products of this business, accounting for 38% and 22% of total revenue in the first half of 2021.
Ternary precursor is the front-end raw material for preparing ternary cathode materials. In the first half of 2021, the high prosperity of new energy vehicles has boosted the demand for lithium batteries, and the sales of upstream lithium battery materials are booming. During the reporting period, the company shipped more than 42,000 tons of ternary precursors and achieved operating income of 3.033 billion yuan, a year-on-year increase of 132.13%. Another major product, cobalt tetroxide, has achieved shipments of nearly 8,500 tons and achieved sales revenue of 1.782 billion yuan against the backdrop of growing demand for downstream lithium cobalt oxide batteries, a year-on-year increase of 95.20%.
However, the precursor industry is a cyclical industry and is greatly affected by overall supply and demand as well as rising prices of upstream raw materials. Affected by the rising prices of upstream raw materials such as nickel salt, cobalt salt, and manganese salt, the gross profit of GEM's ternary precursor products has been compressed. In the first half of last year, the gross profit margin of the company's ternary precursor business was 25.63%, a decrease of 1.30 percentage points from the same period last year. Another major product, cobalt tetroxide, was also affected by rising raw material prices, with gross profit margin falling by 3.86 percentage points year-on-year.
Affected by this, GEM’s non-net profit in the single quarter last year decreased quarter by quarter. In the first three quarters, it was 254 million yuan, 243 million yuan, and 168 million yuan respectively.
It can be seen that GEM is also urgently deploying upstream raw materials to enhance its ability to resist risks.
In terms of upstream raw material layout, GEM has taken the lead in cooperating with Tsingshan Industrial to build an Indonesian nickel resource base and lock in nickel resources of 500,000 metal tons; in addition, the company has accelerated the construction of Indonesian nickel resource projects, which is planned to be completed in 2021 It will be constructed and put into operation in early 2022 to meet the company's strategic needs for nickel resources for the development of precursor materials. On the interactive platform on January 24, the company stated that the nickel resource project is progressing as planned and is scheduled to be put into operation in the first half of 2022.
Standing at the forefront of the development of the lithium battery industry, GEM’s stock price has been rising since early December 2020, and hit a record high of 13.99 yuan/share on July 23, 2021. During this period, the stock price increased by nearly 170%. However, the stock has since made a sharp correction. As of January 28, it closed at 8.78 yuan per share. The stock price fell by about 30% in half a year.
After the stock price rose sharply, the company’s controlling shareholders, actual controllers, and senior executives have all cashed out. According to GEM's recent announcement, the company's controlling shareholder Shenzhen Huifengyuan Investment Co., Ltd. (hereinafter referred to as "Huifengyuan"), persons acting in concert Fengcheng Xinyuanxing New Materials Co., Ltd. (hereinafter referred to as "Xinyuanxing"), and actual controller Xu Kaihua and Wang Mingang completed a round of shareholding reduction in December 2021. The above shareholders reduced their holdings by a total of 69,200 shares from July 9 to December 22, 2021, accounting for 1.45% of the company's total share capital. From July 7 to July 13, 2021, seven directors, supervisors and senior executives including Zhou Bo, Wang Jian, and Song Wanxiang completed a total reduction of 123,500 shares.