Xinwangda consumer lithium battery continues to grow

Event: Xinwangda announced the first quarter of 2018, operating income of 3.535 billion Yuan, an increase of 59.53%, net profit attributable to shareholders of listed companies of 115 million Yuan, an increase of 58.81%, deducting non-recurring gains and losses attributable to listed companies The net profit was RMB 76 million, a year-on-year increase of 46.93%.

Lithium-ion battery leader, performance has maintained rapid growth. The company takes lithium-ion batteries as its core and comprehensively deploys 3C consumer batteries, lithium-ion batteries, power batteries and smart wearable devices. During the reporting period, under the unfavorable situation of the overall decline in the mobile phone market and fierce competition, the consumer lithium battery continued to grow, the electric vehicle battery system business expanded rapidly, the power battery production line was constructed smoothly, and the company achieved overall operating income. And steady growth in net profit. At the end of the reporting period, the company completed a fixed increase, and this year will reduce the proportion of financial expenses.

The market share of mobile digital services has further increased. In the field of consumer batteries, the company has become a global supplier of well-known brands such as Huawei, Xiaomi, OPPO and VIVO, and its market share has remained at a high level. The company has cut into the supply chain of many product lines of major international customers, and its market share will continue to maintain rapid growth. In 2018, the mobile phone digital battery double-cell, shaped battery solution penetration rate increased, bringing the value of a single battery to increase. After the company acquired Dongguan Liwei, it continued to invest in the R&D and production of batteries, and has completed the expansion of Huizhou Park. In the future, with the increase of the core rate, the company's revenue and profit levels will continue to rise.

Tablet and notebook business accelerated penetration. At present, the company's notebook business has a low market share. As the notebook battery shifts from 18650 to polymer soft pack, the global battery PACK supply chain shifts to the mainland. The company enters the global tablet and notebook battery supply chain and further seizes Taiwanese manufacturers. Share. In 2017, the company's notebook business revenue accounted for only 7.73%, and the tablet and laptop battery unit price is several times that of mobile phones. We expect the company's notebook computer business revenue to be equal to the mobile phone digital business revenue in the future.

The power battery technology industry is leading, and the performance improvement is highly certain. The energy density of the power battery developed by the company can reach 210Wh/kg, leading the industry. Actively develop customers, have already supplied Geely Automobile, and signed a strategic cooperation framework or cooperation memorandum with five new energy vehicles such as Liuqi, Xiaopeng and Yundu. At the same time, the construction of the power battery production line in Huizhou Park is smooth. In the second half of 2018, the 2GWh capacity of the first phase can be mass-produced. It is expected that the production capacity of 6GWh (including 4GWh batteries) in the first half of 2019 will be completed and put into production. With the mass production of power batteries, we expect the power battery business to increase by about 300% in 2018.

Intelligent hardware innovation model is becoming the largest supplier of Xiaomi ecological chain. In terms of intelligent hardware, the company cut into the supply chain of enterprises such as Xiaomi and Dajiang, and became a new growth point for the company. In 2017, the company's smart wearable equipment increased by 316% year-on-year, mainly because of the innovation of Xiaomi's ecological chain, which brought the company's shipment growth. At the same time, the company expanded its market space from the provision of lithium-ion batteries to foundry services. The revenue and profit margin of the sector business, the net interest rate is about 1% higher than the company's average net profit margin. The company continues to deepen its cooperation with Xiaomi's ecological chain, expands its product range and continues to expand its market space. We expect that the company's intelligent hardware business will continue to grow at a high rate in 2018, an increase of more than 100%.

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