Investment strategy tips for Evebattery
Evebattery is the leader in lithium batteries and electronic cigarettes, and gradually expands into the field of lithium-ion batteries for electronic cigarettes: the company started its business as lithium-ion batteries, entered the field of consumer lithium-ion batteries in 2012, merged and introduced electronic cigarettes business in 2014, and expanded the application of lithium-ion batteries to power and energy storage fields in 2015-2016.
Income from electronic cigarette investment continued to increase: as of 2017, the proportion of electronic cigarette market was only about 5%, with huge space. The company holds 37.55% of the shares of Smoore through mergers and acquisitions, and more than 70% of Smoore’s ODM orders are for international customers. In the future, the company will follow the lead customers to share the high growth path.
Intelligent meter replacement and new ETC demand drive lithium batteries growth recovers quickly: Intelligent meter belongs to the strong inspection equipment, the first batch of equipment has reached a period of 5 to 8 years retirement date, the replacement demand is large; the State Council requires that the provincial toll station of Expressway be basically cancelled within two years to realize non-stop toll collection, affected by this, ETC and other promotion make efforts to speed up. In addition to other requirements, the company’s lithium-ion battery growth is expected to rebound to 20-30% in 2019.
Cylindrical batteries turn to the consumer market, and Evebattery focuses on square batteries now: The company has 3.5GWh capacity of cylindrical batteries, positioning gradually transfer from power to consumer market, and has won leading orders for power tools such as TTI, after full production, it will become one of the driving forces of performance growth in 2019. Power batteries are introduced SKI funds and technical support, lock in the square soft package technology route, and succeed in becoming Daimler and modern Kia international first-line car companies fixed service point; the company synchronously develops the square aluminum shell ternary and iron-lithium routes, in order to seek a broader market space.
The short-term fluctuation risk of power batteries exists, but the long-term growth trend remains unchanged: in May 2019, the installed power batteries were 5.68GWh, which continued to increase by 26%, 5% annually and slowed down. Influenced by the refund and low-price promotion of traditional Guowu automobile, the short-term sales of new energy automobiles are at risk of fluctuation, but the price of new energy automobiles is still below its cash cost and the probability of big discount promotion of Guowu automobiles is low. Therefore, the sales forecast for 2019 will not be adjusted for the time being. In the medium and long term, considering that there is still a lot of room for price reduction in the industrial chain, the economy of new energy vehicles is gradually highlighted in some application scenarios, and the industry is expected to continue to grow.
Risk hints
The impact of trade wars on overseas business is beyond expectation; the return of e-cigarette investment is not as expected; the breakthrough of power battery is not as expected; the growth rate of new energy vehicles is not as expected; and the price fluctuation of upstream products is beyond expectation.
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