highpower international: 2016 ev lithium-ion battery sales doubled, earnings soared 60%

by:CTECHi     2020-01-16
Micro-
Hi-Tech International (cap)NASDAQ:HPJ)
Fourth Quarter and Full Year
This year\'s financial performance this morning, as expected, is a home run.
Prices of lithium have risen sharply
The sale of ion batteries in the third quarter of 2016 seems sustainable and reappeared in the fourth quarter, which indicates a good development in 2017.
In addition, the recent equity of China\'s PHEV and EVs battery system providers should make the big pattern of HPJ Li-
This fast-growing market segment sells ion batteries.
I said the results were \"as expected\" because the company announced the unaudited results three weeks ago.
At that time, investors were told that 90-
Non-related day exclusivity provisions
The binding framework agreement with Anshan has expired and HPJ decided not to move forward.
Part of this decision may be made by HPJ-
As evidenced by the EPS report --
Seems to do a good job.
Please note that at the conference call in the fourth quarter (
See looking for Alpha Records here), Sherry Chen -
Senior assistant and Mandarin translation
Comments on Anshan proposal: EPS reports for 2016 and full year are very optimistic: Source: SEC 8-
K FilingAs can see that net sales increased by only 19%, gross profit increased by 36%, operating income increased by 81%, and bottom line net income increased by 60%.
The number of fully diluted outstanding shares is actually slightly lower than the same period last year.
Some of the highlights of the recorded results include EBITDA\'s 30% year-on-year increase to $13.
8 million: Please note, however, that EBITDA grew by 91% year on year in the fourth quarter.
This is due to the Great Acceleration of Li-
Compared with the same period last year, the sales of ion batteries experienced in the 2nd half of 2016.
Outlook as mentioned earlier, high-power lithium-
Ion battery sales in the third quarter of last year.
The following figure shows: Source: March presentation note that the fourth quarter growth is basically sustained and there is no reason to believe that lithium-
Ion batteries will not continue to be sold in the future.
I say this because battery sales rose 43% year on year in the fourth quarter because of increased battery sales in the market for electric vehicles, smart wearable devices, digital products and handheld devices.
All these Li
The ion battery market is expected to grow in the next few years: in particular, the electric vehicle market alone is expected to expand to about 90,000 MWh/year by 2020.
It\'s 2016 ~ More than 3 times shipments of 25,000 MWhr/yr.
In order to take advantage of the growth trajectory of electric vehicle shipments, on last August, HPJ signed an equity purchase agreement with Huizhou Yipeng energy technology, an electric vehicle power battery system solution provider specializing in plug-in
In hybrid cars (\"PHEV\")
Electric vehicles (\"EV\")
Bus market in China
There are currently 35 HPJ.
A 4% stake in Yi Peng, the agreement allows Haiquan to hold a 50% stake in the company.
However, Gao Quan also has the right to purchase additional equity from existing Huizhou Yipin shareholders for $0.
4 million, this will give Gao Quan a 51% stake in Huizhou Yipeng.
This is a very positive catalyst and should increase the sales of HPJ large format lithiumion batteries.
This will have a very positive impact on revenue growth and manufacturing efficiency.
Please note that the terms of the ipeng purchase agreement grant HPJ equity in return for battery equipment and cash.
As sales figures for the third and fourth quarters show, this effectively increases the penetration of HPJ into the electric vehicle market. Sherry Chen -
George Pan, Chairman and CEO
Highpower\'s electric vehicle shipments doubled in 2016, the report said: investors also found on the phone that HPJ\'s recycling business net sales of $4. 5 million (2.
6% of total net sales)
In FY2016, it represents $1.
It was 5 million more than the previous year\'s $3 million.
Q1 is usually a seasonal low for HPJ sales.
In the past, the \"post-Christmas\" effect of consumer sales was very significant.
However, as the company begins to sell more batteries to the electric vehicle market, as well as the 1000Wh portable power station products currently offered by Fry electronics (
Currently priced at $1,050/set)
This seasonality should ease.
Another product that helps achieve quarterly revenue is the stylish and popular Mophie Powerstation product now available on Verizon\'s website, which has received excellent reviews.
Shareholders of HPJ will remember the large Mophie supply announcement released in 2015.
As a result, HPJ\'s total sales can easily reach $240
$0. 25 billion this year.
At the midpoint, this figure will grow by 40% year-on-year, nearly double the growth rate in 2016.
Construction profits contracted slightly due to expected competition, and HPJ can earn $0. 50-$0.
Share of 55/2017 years.
Put a P/E = 12 on it and the stock can easily rise to $6.
The chart shown at the end of this article shows that the current market value of HPJ is $82 million.
This is not correct. Based on 15.
1 million shares have been issued for $4.
The current market value is $62. 7 million.
Only 2016 of the total sales for 36% of the year, only 4. 6x full-Annual ttm ebitda.
But this does not take into account the debt of HPJ.
Highpower is only $9.
Cash at the end of 2016 3 million (up from $5.
2015 The end of 8 million), $30.
Remarks 7 million (long-term debt), and $18.
7 million in short-
Regular loan, $3.
In non 7 million
Financial loans (
See previously referenced 8-K).
It\'s $53 in total.
1 million of the debt and $43.
Net liabilities were 8 million per cent.
This amounts to an estimated business value of $106. 5 million -
There is still only about 60% of total sales in 2016, and electric vehicles are 7. 7x EBITDA.
Now, let\'s say that HPJ can increase EBITDA by another 25% this year (i. e.
5% less than 2016).
This gives a forward EBITDA estimate of $17. 2 million.
Even goods
Market-based
Multiple EBITDA Multiple, so it is 7.
5x multiple of $17.
EBITDA\'s 2 million indicates that the price of electric vehicles is $129. 1 million.
Minus net debt ($43. 8 million)
The market cap is $85. 3 million, or -
According to the number of shares issued-$5. 65/share.
But again, this is based on the fact that EBITDA grew by only 25% this year, and given that EBITDA grew by 30% last year in the fast-growing Li-it could be a bit conservative
Market for ion rechargeable batteries
If EBITDA\'s argument is not convincing enough, HPJ can easily earn $0 on a simple Earnings per share basis. 55 to $0.
60 this year.
Conservative PE = 10, which will make the stock price about $5. 75 by year-
Ended up nearly 38% higher than Wednesday\'s $4 close. 15.
The point is that HPJ is an attractive investment (
Or acquisition candidate)
From the price to the sale, from the perspective of EPS, the EBITDA multiple is expected.
In addition, it is important to recognize that HPJ management says it currently has a sales capacity of $0. 4 billion
Total income is more than twice that of 2016.
The extra manufacturing capacity should be higher than my EBITDA --
Valued at $5. 65/share.
So for some of the big Chinese battery manufacturers, HPJ seems to be an underrated acquisition candidate who is looking for a very economical way to increase the countryof-the-art Li-
Ion rechargeable battery manufacturing capacity.
Risk risk is obvious to some extent, because HPJ is a relatively small Chinese company and will face increasingly fierce competition (i. e. lower margins)
From larger battery manufacturers, some of which are listed below: Source: The small size of Tesla\'s speech at the EIA conference HPJ makes it a proven flexible competitor capable of customizing small productssized Li-
Ion battery solutions for the mobile market, still able to compete in large lithium batteries
Ion batteries in the electric car section.
One risk is that net profit margins may fall
Despite potential sales growth
It may slow the growth of EBITDA.
Another risk is the G & A expense aspect of the ledger.
Please note that G & A grew 88% year-on-year to $5 in the fourth quarter. 9 million.
The increase was mainly due to salary and performance bonuses paid to employees, impairment losses on machinery and equipment, and a suspicious account allowance of $0. 7 million, $0.
$5 million and $1.
6 million respectively.
Investors should keep an eye on the future of G & A in case management decides to pat each other on the back too much and/or too often. $5.
9 million of G & A may not sound like that, but for A small company with A net income of only $6 for the whole year.
1 million is a considerable sum.
Anyway, if public investors are to share the success of the company, it is clear that HPJ cannot maintain G & A growth at this rate. At 15.
1 million shares, the company has a small floating.
Therefore, investors should be prepared for the sharp fluctuations in stock prices.
Because the stock price is low, it is often the favorite of short sellers. sellers (
Just read the comments from my previous HPJ article).
That is to say, small floats (
And short coverage)
Can also be used as a positive catalyst.
It is worth noting that, following the excellent earnings per share report, the stock price soared about 30% yesterday to nearly $5, but only returned $0. 75/share (15%)
It closed at $4 today. 15.
Like I said, it\'s a volatile stock.
Especially before and after the EPS reporting date.
Summary and conclusion hpj provides excellent financial and operational results throughout the year.
A sharp rise in lithium
Ion battery sales in the third quarter of 2016 appear to be sustainable and continue until the fourth quarter. A 35.
A 4% stake in China\'s electric vehicle battery maker Yipin energy is a very positive catalyst as electric vehicles are expected to be the biggest and fastest growing industry in the entire lithium industry
Ion Battery market
According to the valuation, HPJ can easily trade $5.
89/the long-term growth rate of shares based on EBITDA was 25%.
In the acquisition, the company may gain more, considering that it has more than twice the manufacturing capacity (based on full-
Total sales in 2016)-
This should be a premium. HPJ is a BUY.
However, Haiquan is a small company, a speculative investment, not for the hidden heart.
But HPJ is worth considering if you are really \"looking for Alpha.
Please note that when the company makes only $0, rising to $6 will still keep the HPJ below the high of 2014.
18/share, less than $0 for half or 2016.
40/share of net income.
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Disclosure: I am/We are long HPJ.
This article was written by myself and expressed my views.
I received no compensation (
In addition to Seeking Alpha).
I have no business relationship with any stock company mentioned in this article.
Supplementary disclosure: I am an engineer, not a CFA.
The information and data provided in this article are obtained from company documents and/or sources that are considered reliable, but are not independently verified.
Therefore, the authors cannot guarantee their accuracy.
Please study on your own and contact a qualified investment consultant.
I\'m not responsible for the investment decision you made.
Thanks for reading, good luck!
Editor\'s note: This article covers one or more microcap stocks.
Please note the risks associated with these stocks.
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