\u3000\u3000 Nanjing Hanrui Cobalt Co.Ltd(300618) (300618)
Event: Nanjing Hanrui Cobalt Co.Ltd(300618) released the performance forecast. It is estimated that the net profit attributable to the parent company will be 600 million yuan to 700 million yuan in 2021, with a year-on-year increase of 79.37% – 109.27%. Among them, the net profit attributable to the parent company is expected to reach 114 million ~ 214 million in Q4, with a year-on-year increase or decrease of – 34% ~ 23.99% and a month on month increase or decrease of – 12.83% ~ 63.78%.
The company flexibly switches production lines, realizes production expansion and efficiency, and responds to market changes. 1) The company plans to use its own funds to rebuild the “5000 tons of Electrodeposited cobalt” production line into “6000 tons of electrodeposited copper” production line, which is expected to be put into operation in early 2022; 2) It is proposed to reconstruct the original production line into a “5000 ton cobalt hydroxide” production line, which is expected to be put into operation in the second quarter of 2022; 3) Anhui Hanrui’s new capacity of 2000 tons of cobalt powder is expected to be put into operation in the first half of 2022. 4) The company is also actively dispersing cycle risks to the downstream layout. Ganzhou Hanrui cobalt new material (cobalt salt and precursor) project is expected to be put into operation in 2022 and 2023 respectively, and the profitability of the enterprise is expected to be further improved after being put into operation.
The company’s long-term development strategy is clear and optimistic about the sustainability of performance growth. On December 27, the company resubmitted the application for issuance and listing to the Hong Kong stock exchange. The application disclosed that the raised funds were used for the investment and development of upstream nickel cobalt lithium overseas resources, the expansion of midstream smelting and processing capacity, and the increase of sales and R & D.
Investment suggestion: we expect the company’s operating revenue to be 4.646 billion yuan, 5.426 billion yuan and 5.817 billion yuan respectively from 2021 to 2023, and its net profit to be 613 million yuan, 1.006 billion yuan and 1.207 billion yuan respectively, with corresponding EPS of 1.98, 3.9 and 3.61 yuan / share respectively. At present, the corresponding PE share price is 38, 19.3 and 20.8 times. “Buy-A” rating was given for the first time, and the six-month target price was 115 yuan / share.
Risk warning: the project progress is less than expected, the demand is less than expected, and the price of copper and cobalt falls.
