The prosperity of the battery industry continues to grow
According to the data of Dongguan securities, from January to March 2021, the production and sales of new energy vehicles in China reached 533300 and 514700 respectively, with a significant year-on-year increase of 407.32% and 351.29%. This has also driven the performance growth of the lithium battery industry. From January to March 2021, the installed capacity of lithium batteries in China was 23.24gwh, a significant year-on-year increase of 209.74%. The industry realized a revenue of 107.371 billion yuan in 2021q1, a year-on-year increase of 90.86%; The net profit attributable to the parent company was 7.769 billion yuan, a year-on-year increase of 344.34%; The non net profit deducted was RMB 6.642 billion, a year-on-year increase of 787.17%. Not only the revenue and profits have increased, but also the overall profit-making effect of the industry is emerging, and the profit margin is rising. The gross profit margin of the industry in the first quarter of 2021 was 19.76%, a year-on-year increase of 8.33 percentage points; The net interest rate was 8.22%, a year-on-year increase of 4.52 percentage points.
Looking forward to the future, the market expects that the output of new energy vehicles may increase by another 20% month on month in the second quarter. After the release of new production capacity in the middle of the year, the industry output is expected to increase by more than 30% month on month in the second half of the year. According to the orders predicted by leading enterprises, the growth rate may further exceed the expectation.
The capacity growth of new energy vehicles will certainly drive the growth of power battery demand, and the plate's high momentum may run through the whole year.
Leading enterprises have significant competitive advantages
New energy battery mainly refers to the battery with lithium as the cathode material. It has the characteristics of good safety, high energy density and little harm to the environment. It is mainly used in the field of new energy vehicles and electric energy storage.
In the field of new energy vehicles, the cost of power battery accounts for the highest, reaching 38%. In addition, it also includes interior and exterior decoration (15%), chassis (14%), automotive electronics (9%), motor (7%), electronic control (6%) and other fields. Overall, new energy vehicles cover a long industrial chain, including high growth industries such as batteries and automotive electronics, as well as sub plates such as chassis and interior and exterior decoration.
Among all sectors, battery is undoubtedly one of the most noteworthy sub sectors. It not only accounts for the highest proportion in the cost structure of new energy vehicles, but also forms the "three electricity" system of new energy vehicles together with motor and electronic control, breaks the core competitive barrier (power system) of traditional automobile enterprises, and successfully develops a new automobile production mode.
The battery industry is a highly concentrated industry, and the competitive advantage of domestic new energy battery leading enterprises in the world is very obvious. Among the top ten power battery suppliers in the world, Chinese enterprises account for half, and the market share has reached 37.28%.
Further analysis shows that having a perfect supply chain makes Chinese enterprises more globally competitive. In this regard, compared with the long-term impact of chip shortage and price rise, and subject to more foreign new energy vehicle enterprises, China's battery leading enterprises will have stronger bargaining power and significant competitive advantage in the world in the future.
Therefore, whether it is the overall growth of the industry or the competition pattern of Chinese enterprises, the battery industry has certain advantages over the new energy vehicles as a whole. It can be said that the power battery is the golden track in each plate of new energy vehicles.
Fixed investment strategy to mitigate the risk of overvaluation
As of the closing on July 5, 2021, the dynamic price earnings ratio PE (TTM) of Guozheng Xinneng battery index was 107.64 times, which was in the historical quantile of 89.6% since the index was listed (February 2015), and was at a relatively high level in history as a whole. The high valuation given to the battery sector by the market is mainly due to its high industry prosperity and the overall upward valuation center caused by the relatively abundant market liquidity in the near future.
From the perspective of industry prosperity, the battery sector has high growth and rapid net profit growth. According to wind's forecast data, the index's net profit growth in 2021 and 2022 is expected to reach 67.14% and 35.80%. From the perspective of the overall liquidity of the market, there is still no significant tightening of monetary policy. Therefore, the overestimation of the battery industry is expected to continue in the short term.
Under the high profit growth rate, the corresponding price earnings ratio (PE) of Guozheng Xinneng battery index in 2021 and 2022 is expected to drop to 74.49 times and 54.85 times respectively. In the long run, the state securities new energy vehicle battery index may still have high investment value.
If investors' risk appetite is relatively conservative, the "three high" index of battery can adopt the investment strategy of buying in batches or fixed investment, smooth the volatility of the index through time, adhere to long-term investment and enjoy the investment dividend brought by the overall development of the industry.
To sum up, the market share of China's new energy battery enterprises in the world has increased steadily, and the background of "carbon neutralization" has also brought trillion yuan of growth space to the industry; From the perspective of investment, although the current valuation of the sector is relatively high, its high valuation is expected to be sustained by high growth, thus bringing better long-term investment opportunities.
