GEM (002340): Long-term long-term high nickel ternary supply framework agreement enhances the core position of the company’s industrial chain

GEM (002340): Long-term long-term high nickel ternary supply framework agreement enhances the core position of the company’s industrial chain

Company status: Company announcement and ECOPRO BM multi-year cooperation memo.

From 2020 to 2026, ECOPROBM will purchase a small amount of NCM8 series and 9 series high-nickel materials for GEM from not less than 10 inches. The specific procurement situation is subject to the annual contract. In June and December each year, the purchase price is agreed.

The release cooperation is a framework agreement and there are still uncertainties.

Comment The high nickel products entered the core supply system, driving the company’s high nickel precursor core position to rise.

ECOPRO BM parent company ECOPRO is the external core supplier of Samsung SDI, 8 series, 9 series are the latest generation of high nickel precursor materials for power batteries.

We believe that the trend of the development of high-nickelization of raw materials will expand significantly in the future. We expect that the global high-nickel 8-series products will account for about 1/4 of power batteries in 2022.

Through this cooperation, it will help to promote GEM’s own high nickel technology progress, increase the company’s market share in high nickel ternary precursors, and expand market share.

We are optimistic that the company, as a leading company in the precursor industry, fully enjoys the high-speed growth dividend of the industry.

The upstream and downstream cooperation in the industrial chain was further deepened, and the leading companies’ competitive advantages improved.

We believe that the significance 南宁桑拿 of this long-term procurement cooperation to ECOPRO lies in locking the capacity of upstream high-quality suppliers.

After the “compensation” decline, through the further development of the new energy vehicle industry, we believe that lithium battery companies have appealed to increase cooperation with upstream high-quality material suppliers to ensure the source of high-quality raw materials, and the leading companies’ competitive advantages continue to increase.

We have long been optimistic that the share of Grammy will continue to increase.

The company’s production capacity is under control, and its sales are expected to maintain high growth in the long run.

In 2019, the company has built a precursor production capacity of about 10 tons / year, and we expect the company’s capacity growth to increase to 20 tons 武汉夜网论坛 / year in 2021.

Due to the impact of the epidemic, national (especially Hubei) holidays have been extended, which may affect the company’s production and operation in the short term.

However, in the long run, we believe that the company’s technology, customers, and supply chain scale have obvious advantages. Through the increase of the company’s production capacity, it is still optimistic that the sales volume will remain high in the long run.

Investors are advised to continue to pay attention to the company’s production and operation.

It is estimated to maintain the company’s 2019/20208.

5/10.

The 8.7 billion profit forecast is unchanged, and the 2021 profit forecast13.

900 million.

Maintain the company’s “Outperform Industry” rating. Considering the strengthening of the company’s competitive advantage, we raise the company’s target price by 15% to 6.

9 yuan, corresponding to 34.

5/26.

5/20.

9 times the 2019/2020/2021 price-earnings ratio, which has continued to increase by 20% compared to the recent period, and currently continues to correspond to 28.

2/22.

0/17.

2x 2019/2020/2021 price-earnings ratio.

Risk company expected to resume work, risk of price fluctuations, risk of future accounts receivable.