Ronbay Technology(SH:688005) Yong Xing Zheng Quan·2024-06-21 03:30Investment Rating - The report assigns a "Buy" rating for the company, marking its initial coverage [5]. Core Views - The company, Rongbai Technology, is a leader in high-nickel ternary cathode materials, with a global strategic layout. Despite a decline in profitability in 2023, the company is expected to maintain its leading position in the industry [5][32]. Company Overview - Rongbai Technology, established in 2013, is a multinational group formed by a Sino-Korean team with over 20 years of experience. The company specializes in high-nickel ternary cathode materials, including NCM523, NCM622, and NCM811 [13][15]. - The management team has a strong background, with key figures including Bai Houshan and Liu Xianglie [26][29]. Financial Analysis - In 2023, the company's revenue was 22.66 billion yuan, a year-on-year decrease of 25%, while the net profit attributable to the parent company was 580 million yuan, down 57% year-on-year [32]. - The ternary cathode materials business accounted for 93% of total revenue in 2023, with a declining gross margin from 16% in 2021 to 8% in 2023 [33][32]. Industry Overview - The demand for ternary materials is driven by the growth in the electric vehicle and energy storage sectors. In 2023, the global ternary material production was 966,000 tons, a slight decrease of 2.8% year-on-year, but the company maintained its leading position with a market concentration of 61% among the top five producers [40][52]. - The forecast for 2024 indicates a production increase to 750,000 tons, with a focus on high-nickel products [56]. Key Highlights - Rongbai Technology possesses core technological capabilities, including precursor co-precipitation technology and high-voltage single crystal material production technology [64]. - The company is expanding its global footprint with plans for R&D centers in Korea, the USA, and Europe by 2025 [65][66]. Earnings Forecast and Valuation - The company is projected to achieve revenues of 22.85 billion yuan in 2024, with a growth rate of 0.9%, and net profits of 638 million yuan, reflecting a 9.8% increase [69]. - The estimated PE ratios for 2024 and 2025 are 19 and 13, respectively, indicating a favorable valuation compared to peers [72].