GEM (002340): Performance slightly exceeds expectations Strong cash flow Expects capacity release

GEM (002340): Performance slightly exceeds expectations Strong cash flow Expects capacity release

2018 results were slightly higher than expected The company’s 2018 results announced: reported 成都桑拿网 consolidated revenue of 138.

78 ppm, an increase of 29 in ten years.

07%, net profit attributable to mother 7.

30 ppm, an increase of 19 years.


Slightly exceeded the Air Force Express and our expectations.

Deduct non-attributed net profit 6.

570,000 yuan, an increase of 8 in ten years.


The company’s non-recurring profits and losses mainly come from government subsidies.

The increase in performance was mainly due to the battery materials segment and the cobalt nickel tungsten powder and cemented carbide business.

Reporting on the baseline, the battery materials business is growing by 43 per year.

97% to 79.

64 ppm; cobalt-nickel-tungsten powders and cemented carbides increase by 45 per year.

39% to 29.

7.7 billion.

Report intelligence, company operating cash flow9.

8.5 billion 厦门夜网 yuan, an annual increase of 322%.

We believe that the level of the company’s industrial chain has continued to improve, the repayment is stable, and the company’s cash flow quality is expected to continue to improve.

The company increased the research and development of battery technology, and the research and development expenses increased by 41.

88% to 4.

2 ‰; due to the increase in corporate debt, financial expenses increased by 33.

35% to 6.


Development Trend The company’s battery materials segment is expected to continue to release performance in the future.

The report merged, the company continued to develop the battery industry chain, and Bangpu (CATL subsidiary), Qingshan Iron and Steel and other companies established joint ventures to further expand production capacity and deploy high-nickel ternary batteries.

At the same time, the company further expands its downstream customers, including CATL, Samsung, Rongbai and other leading enterprises, to consolidate the company’s core supplier level and ensure the company’s product sales.

The announcement of the non-public offering plan, if successfully landed, will effectively strengthen the company’s capital strength.

The company plans to raise non-public offering of stocks to raise less than US $ 3 billion in capital. The non-public offering of capital does not exceed 20% of the company’s share capital before the issue. The raised funds will be used for the company’s battery industry chain and power battery pack projects.

We believe that if the progress is smooth, the company’s capital capacity will be greatly enhanced, and the company’s capacity under construction will be promoted.

Earnings forecast We are optimistic about the future sales of the company’s products, and raised our 2019 / 2020e earnings forecast by 11% / 2% to 10.


8.7 billion.

Estimates and recommendations Companies currently sustainably correspond to 19/20 years 19.


6 times P / E.

Maintain recommended level and target price 7.

03 yuan is unchanged, corresponding to 27/24 times P / E in 19/20, compared with 39 at present.5% space.

Risks Raw material price risk, overcapacity risk, policy risk.