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中信证券:锂电行业各板块PE估值处于历史较低分位区间 重点关注头部企业

CITIC Securities: PE valuations in various sectors of the lithium battery industry are in a historically low quartile range, focusing on leading companies

Zhitong Finance ·  08/22/2023 09:04

Zhitong Finance App learned that CITIC Securities released a research report indicating that currently PE valuations in various sectors of the lithium battery industry are in a historically low quartile range, and the allocation cost is relatively high; the overall capital expenditure growth rate of the lithium battery industry is slowing down, but the proportion of fixed assets in construction projects is at a historically high level. At the same time, the current scale of capital on hand is a key factor affecting the industry's new round of capital expenditure. Therefore, production capacity in the segment where capital expenditure is falling the fastest, the share of projects under construction is relatively low, and capital on hand is scarce is expected to be the first to be cleared, and leading companies are expected to benefit.

Recommendation: 1) The battery sector where the growth rate of capital expenditure is declining the fastest, and the industry pattern is expected to accelerate clearance; 2) the share of projects under construction is relatively low, capacity expansion is greatly limited by the scale of capital, and the future supply and demand pattern is expected to maintain an excellent diaphragm chain; 3) Other lithium battery materials links where capital expenditure growth is declining, subsequent new production capacity expansion is limited by capital restrictions, and low- and middle-end production capacity is expected to be cleared at an accelerated pace.

The main views of CITIC Securities are as follows:

Summary: The valuation of the lithium battery industry has bottomed out, and the growth rate of capital expenditure has slowed down.

By measuring the historical valuation level of the industry since 2019 (including total market value versus PE valuation for the year, second year, and third year), we sought valuation anchors for the current lithium battery segment. Measurement results show that currently most of the lithium battery industry segments (batteries, ternary precursors, ternary cathodes, and diaphragms) correspond to 2023-2024 PE in the 5% lower quantile range since 2019, and the valuation of the lithium battery industry has bottomed out. Second, by reviewing the historical financing and capital expenditure situation of the lithium battery industry, and analyzing the current capital expenditure growth rate, construction in progress, and capital on hand, etc., we believe that the overall capital expenditure growth rate of the industry has slowed marginally, and that future production capacity in some segments is expected to accelerate.

Resumption: Battery financing accounts for more than 50%, supporting large-scale growth in the industry's fixed assets and projects under construction.

We have sorted out the financing projects of companies in various sectors of the lithium battery industry in recent years (IPOs, non-public offerings, fixed increases, convertible bonds, overseas GDR and other refinancing activities). Since 2020, the total amount of financing received by the lithium battery industry has been about 231.4 billion yuan, of which the battery sector has reached 118 billion yuan, accounting for the highest proportion, reaching 51%. With funding support from IPOs and refinancing projects, capital expenditure in the lithium battery industry has increased dramatically in recent years, and “fixed assets” and “projects under construction” on the balance sheet have increased dramatically. By the end of 2023Q1, the total fixed assets and construction scale of the lithium battery industry were about 461.4 billion yuan, of which the battery sector totaled 239.5 billion yuan, accounting for 52%, which is basically in line with the financing ratio.

Currently, marginal changes in capital expenditure in various sectors of the lithium battery industry are as follows:

1) The growth rate of capital expenditure is slowing down: Statistically, the year-on-year growth rate of “fixed assets+construction in progress” in the lithium battery industry in 2019/2020/2021/2022 was 39%/27%/50%/78%, respectively, and the 2023Q1 growth rate was about 62%, down about 21pct from the high of 83% in 2022/Q2. The growth rate of batteries and lithium iron cathode declined the fastest in the segmentation process.

2) Increased share of projects under construction: According to our estimates, the proportion of projects under construction in the lithium battery industry as a whole accounted for about 35% of fixed assets in 2019-2020. The proportion gradually increased in 2021, reflecting the continuous expansion characteristics of the industry. By 2023Q1, the proportion reached 51%, which is at a historically high level. The proportion of ternary cathodes, diaphragms, and batteries in the segmentation process is less than 50%.

3) The degree of capital availability is highly differentiated: We use the total scale of monetary capital and transactional financial assets to measure the industry's current capital, and assume that subsequent industries do not use refinancing, etc., and rely only on current funds on hand to support subsequent capacity expansion, and estimate the shortage of funds on hand in all aspects. Estimation results show that the battery sector is currently the most well-funded. As of 2023Q1, the battery sector has about 304.9 billion yuan of capital on hand, which can support fixed asset investment of about 1.2 TWh of battery production capacity. The link where capital is scarce is in the diaphragm and lithium iron cathode industry, and its future financing progress may become a key link affecting the overall production capacity expansion of the industry.

Risk Factors:

The sales volume of new energy vehicles fell short of expectations; the price fluctuation of upstream raw materials exceeded expectations; the progress of industry financing fell short of expectations; and production capacity absorption fell short of expectations.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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