Soochow Securities: LG New Energy starts listing + Yiwei accelerates the expansion of Lithium Power equipment scarcity appears

LG New Energy officially launched the listing process, and there is a strong demand for accelerating financing and production expansion.

Recently, LG New Energy officially launched the listing process, and the company is expected to go public in the third quarter of 2021, raising more than 10 trillion won (about 57.3 billion yuan) to expand lithium power capacity. IPO progress is in line with previous expectations. In the context of the imminent landing of a huge amount of financing, we judge that there is an urgent need for LG2021 to accelerate production expansion in the following years: (1) overseas epidemic & the splitting of LG new energy leads to the postponement of the production expansion plan originally scheduled for 2020 to 2021; (2) under the circumstances of radical production expansion of battery factories such as Ningde era, LG has an urgent demand for production expansion in 2021 to maintain its global competitiveness.

The bidding of LG new energy in the second half of the year is expected to exceed expectations, benefiting core equipment vendors.

LG has an urgent demand for production expansion, and we judge that its bidding in the second half of the year is expected to exceed market expectations.

(1) in the short term, we expect the global production expansion of LG to be 40-50GW in 2021. We judge that the bidding will mainly start in the second half of the year and accelerate on a quarter-on-quarter basis. We assume that the investment of equipment per GW is 200 million yuan, of which the value of rear equipment accounts for 30%, then the corresponding order for rear equipment is about 24-3 billion yuan. Hangke Technology as the first supply of LG equipment, we estimate that the share of Hangke is 70%. Therefore, Hangke's potential order in the major customer LG in 2021 is 16-2.1 billion yuan.

(2) in the medium and long term, LG plans to expand its 120GW production capacity from 2020 to 2023 260GW (continuously increasing ing), that is, about 140GW of new production capacity from 2021 to 2023, corresponding to 8.4 billion yuan of later equipment orders. We assume that Hangke's share is 70%, then we expect Hangke to receive LG 6 billion yuan orders in the next three years, and overseas orders such as LG have a high gross profit margin, which can optimize Hangke's order structure affected by the epidemic and maintain high profitability.

Yiwei Lithium Energy plans the 105GW battery industrial park, and the battery factory expands production and enters the white-hot stage.

According to our information summary, the equipment manufacturers of Yiwei LiNeng in the past are mainly the following: (1) Hangke Technology is the main equipment supplier, and Titan, the leading subsidiary, also has orders. (2) Qiandao and Mid-Road equipment are mainly imported from South Korea (Yiwei LiNeng is mainly soft package route, Korea's stacking machine has strong technical strength) and Yinghe technology equipment, and the leading headquarters also has orders.

Up to now, Yiwei LiNeng has a square production capacity of 12.5GW and a soft package production capacity of 10GW. The planning of 105GW Industrial Park reflects that Yiwei has started radical production expansion. After the completion of the new capacity, the production capacity of square, soft package and cylinder is 96.7GW, 10GW and 9.4GW respectively. In fact, lithium battery industry expansion has entered a white-hot stage, according to incomplete statistics, from the beginning of 2021 to the present, Ningde era, Yiwei Lithium Energy, Guoxuan Hi-Tech, AVIC Lithium, BYD and other power battery enterprises announced new construction, production expansion investment of more than 240 billion yuan, lithium equipment industry has entered the most beneficial stage.

Investment advice:

Emphasis is placed on recommending the rear equipment leader [Hangke Technology] that benefits most from the overseas epidemic expansion, the whole line equipment leader deeply bound with the Ningde era [pilot intelligence], and the integration of deep ploughing power battery system to benefit from the improved PACK automation rate [Xianhui technology]. Suggested attention: [Li Yuanheng] (to be listed), [Lianwang Laser], [Haimu Star].

Risk Tips:

The expansion of battery factories fell short of expectations, the sales of electric cars fell short of expectations, and the impact of the overseas epidemic continued.