【行业研究报告】德方纳米-2021 Earnings Preview:4Q21 beats on improving LFP strengths

Dynanonicexpectstoturnaprofitin2021andpreannouncedattributable
netprofit(ANP)ofRmb760mn-830mnandex-one-offANPof
Rmb730mn-800mnfortheyear;in4Q21alone,ANPmayturnaroundYoY
toRmb520mn-590mn(up373%-437%QoQ),whileex-one-offANPmayturn
aroundYoYtoRmb510mn-580mn(up381%-448%QoQ),beatingmarket
expectations.Asaleaderinlithiumironphosphate(LFP)materials,
Dynanonicboastsleadingproductsandtechnologies,apparentcost
advantages,strongtieswithhigh-qualitycustomersandclearplansfor
capacityexpansion.Thegrowthofpowerandenergystoragebatterieshas
boostedthedemandforLFPmaterials.Withthereleaseofnewphosphate-
basedcathodecapacityandnewproductslikenewlithiumsupplement
additives,itsearningsareontracktomaintainrapidgrowthgoingforward.
Wereiteratethe"BUY"ratingwithconvictioninthestockasatoppick.
▍4Q21preannouncementbeatmarketexpectations.
DynanonicpreannouncedANPofRmb760mn-830mnandex-one-offANPof
DynanonicpreannouncedANPofRmb760mn-830mnandex-one-offANPof
Rmb730mn-800mnin2021andANPofRmb520mn-590mn(+373%-437%
QoQ)andex-one-offANPofRmb510mn-580mn(+381%-448%QoQ)in4Q21
alone,reversinglossesayearagoacrosstheboardandexceedingmarket
expectations.Wemainlyattributeitssubstantialearningsgrowthtothe
followingfactors:1)Fromtheperspectiveofvolume,thecommissioningof
newproductioncapacityhasdriventheproductionandsalesofLFPcathode
materialstoboom.WeexpectitsannualLFPshipmenttoreachabout89kt,
withtheshipmentat54ktin1-3Q21andestimatedatabout35ktin4Q21.2)
Fromtheperspectiveofprice,factorssuchastheincreaseinupstreamraw
materialpricesandthetightsupplyanddemandbalanceintheLFPmarket
havedriventheCompany'sproductpricestorise.3)Fromtheprofitpointof
view,weestimatethatitsprofitpertonneshouldbeaboutRmb15,000-17,000
assuming4Q21shipmentof35kt,asubstantialincreaseQoQfromabout
Rmb4,700in3Q21.WebelievethemainreasonisthatDynanonichasa
certainamountoflithiumcarbonateinventory.Inaddition,itsmanufacturing
costhasdroppedsignificantlywiththecommissioningofnewproduction
capacity,andithasalsobenefitedfromthepricingmodelofdownstream
customersintheprocessoflithiumcarbonatepriceincreases.
▍PlanningtospendRmb7.5bnonnewphosphate-basedcathodecapacity
DynanonicannouncedthatitplanstoinvestRmb7.5bnintheconstructionofa
phosphate-basedcathodematerialproductionbasewithanannualoutputof
330ktinQujingEconomicandTechnologicalDevelopmentZone,Yunnan
Province.Thenewphosphate-basedcathodematerialstobeproducedatthe
Qujingbaseareupgradesofnano-LFP.Comparedwithtraditionalmaterials,
theyhaveahighervoltageplateau(upby15~20%)andcannotablyincrease
theenergydensityofthebattery(by15~20%),whileretainingtheadvantages
ofhighsafetyandlowcost,withpotentiallarge-scaleapplicationsinthefields
ofnewenergyvehicles(NEVs)andenergystorage.Itscontinuousinputin
newphosphate-basedcathodematerialsisconducivetofurtherexpansionof
productioncapacity,optimizationofproductstructure,timelyresponseto
downstreamcustomerneeds,andconsolidationofitsleadingposition.