\u3000\u3000 Yongxing Special Materials Technology Co.Ltd(002756) (002756)
Event: Yongxing Special Materials Technology Co.Ltd(002756) announced that the company and Contemporary Amperex Technology Co.Limited(300750) would establish a joint venture according to the joint venture agreement, with a registered capital of 1 billion yuan (of which Contemporary Amperex Technology Co.Limited(300750) holds 70% and Yongxing Special Materials Technology Co.Ltd(002756) holds 30%), and take the joint venture as the main body to invest in the construction of lithium carbonate project. The total investment amount of the project shall not exceed 2.5 billion yuan. It is planned to build a mining capacity of 6 million tons (mainly contracting the operation of some mines in Ningde) and a lithium carbonate capacity project with an annual output of 50000 tons: the first phase will first invest in the construction of a lithium carbonate capacity project with an annual output of 30000 tons, and the total investment amount shall not exceed 1.5 billion yuan; After the first phase of the project is completed, the construction of surplus capacity will be started. In addition, the company and Contemporary Amperex Technology Co.Limited(300750) will also cooperate on the company’s lithium carbonate products.
Bind Contemporary Amperex Technology Co.Limited(300750) to open the company’s long-term development space. 1) Among the 20000 t / a lithium salt production capacity currently under construction, the products are mainly preferentially supplied to Ningde or its designated party, and the purchase price is given appropriate preferential treatment based on the market price under certain conditions; 2) 100% of the lithium carbonate products of the joint venture are preferentially supplied to Ningde or its designated party. The company is a leading enterprise in mica lithium extraction and has entered the certification system of the world’s leading lithium battery supplier. It is expected to rapidly expand the market share of the enterprise, timely iterate the needs of downstream technological change, and consolidate and enhance the leading position of mica lithium extraction of the company.
Core resource competitiveness is still, and new projects ensure long-term profitability. 1) Self owned projects: the 20000 ton lithium salt production capacity currently under construction of the company is expected to be put into operation in Q1 and Q2 of 2022 respectively, and Huaqiao mining (holding 70%) ensures the raw materials required for the new project, and the cost advantage ensures that the profitability of self-produced lithium salt remains high; 2) New projects: the joint venture (30% equity participation) will put into operation 50000 tons of lithium carbonate capacity in the long term, increasing the company’s equity capacity by 15000 tons. The raw materials of the project are supplied by Ningde, which does not involve the distribution of mineral rights, or effectively improve the company’s long-term profit space; 3) Projects to be developed: the company holds 45.85% equity of Huali mining (with exploitable reserves of 6014200 tons). With the acceleration of China’s resource development, the amount of equity of the company is expected to be further improved, and the core competitiveness of resources and products is expected to be highlighted in the expansion of new projects.
Investment suggestion: we expect the company to achieve operating revenue of RMB 8.695 billion, RMB 12.695 billion and RMB 13.881 billion respectively from 2021 to 2023, and net profit of RMB 914 million, RMB 3.51 billion and RMB 4.012 billion respectively, corresponding to EPS of RMB 2.25, 8.65 and 9.88 yuan / share respectively. At present, the corresponding PE share price is 46.8, 12.2 and 10.7 times. Give a “Buy-A” rating, with a 6-month target price of 129 yuan / share.
Risk tip: the demand fell sharply, the project progress was less than expected, and the shareholders reduced their holdings.
