\u3000\u3000 Tianqi Lithium Corporation(002466) (002466)
The layout of global high-quality lithium resources has a solid leading position
The company realizes the strategic layout of high reserves and high-grade solid lithium ore and salt lake brine lithium ore by holding talison, sqm and other global best lithium source companies. Among them, it holds 26% of talison greenbushes mine, with reserves of 178.5 million tons and production capacity of 1.34 million tons. The third phase of 600000 tons will be put into operation in 2024, with a planned production capacity of 1.94 million tons; It holds 25.86% of sqmatacama Salt Lake, with 48.55 million tons of reserves, 70000 tons of lithium carbonate and 21500 tons of lithium hydroxide in production. It is planned to have 120000 tons of lithium carbonate in 2021, 180000 tons of lithium carbonate and 30000 tons of lithium hydroxide by the end of 2022. China takes the Cuola lithium mine in Yajiang, Sichuan and the Zabuye Salt Lake in Xigaze as its resource reserves, including 100% holding of Cuola, 630000 tons of reserves, 20% holding of Zabuye in Xigaze, 7.1 million tons of resources, and a solid leading position in resources.
With the introduction of Igo, the bottom of debt and profitability reversed
After the introduction of Igo, the company's remaining M & a syndicated loan is US $1.884 billion, of which US $684 million needs to be repaid by the end of 2022 and US $1.2 billion needs to be repaid by the end of 2024. The company's debt repayment has been fully eased. In 2018, the company acquired sqm23 77% of the liabilities were US $3.5 billion in syndicated M & A loans, and the financial expenses and asset liability ratio increased significantly. At the end of 2020, the company introduced Igo, a strategic investor, and received a cash inflow of US $1.4 billion at the delivery in June 21, of which US $1.2 billion was used to repay the syndicated M & a loan. The company's debt pressure was greatly relieved, the profit in the second quarter turned from loss to profit, and the asset liability ratio in the third quarter decreased from 82% to 63%.
Quinana project in Australia is about to reach production capacity, and lithium salt production capacity will be released again.
Relying on the three production bases of Shehong in Sichuan, Zhangjiagang in Jiangsu and Tongliang in Chongqing, as well as the two lithium salt production lines of quinana in Western Australia and Anju in Suining, Sichuan, the company provides lithium chemical products, with an in-process production capacity of 44800 tons and a medium-term planned production capacity of more than 110000 tons. At present, in the construction of Suining Anju 20000 ton lithium carbonate project, the first phase of the 48000 ton lithium hydroxide project in quinana, Australia, will be put into operation in Q3, 2021 and reach production by the end of 2022. Considering the dilution of capacity equity brought by the introduction of Igo and the capacity planning of 180000 ton lithium carbonate and 30000 ton lithium hydroxide in sqm2022, the company is expected to have 143500 ton equity capacity in the future.
The growth rate of global lithium resource supply is high before and low after, and the demand continues to grow high
In terms of supply, with the continuous promotion of production expansion plans of spodumene, salt lake and mica mines at home and abroad, the global lithium capacity is expected to be released. It is estimated that the supply growth rate from 2021 to 2025 will be 21.10% / 36.04% / 31.37% / 26.50% / 24.88%; In terms of demand, driven by new energy vehicles, wind power, photovoltaic power generation, 5g base stations, small household appliances, electric tools, UAVs, etc., the demand for lithium battery cathode materials has increased, and the demand for lithium salt has ushered in an explosion period of the industry. It is expected that the demand growth rate will be 65% / 32% / 23% / 29% / 29% from 2021 to 2025, the gap between supply and demand will increase to 90000 tons by 2025, the supply contradiction will continue to tighten, and the lithium price is expected to be high.
Profit forecast and valuation
As a leading enterprise with lithium as the core, the company has the world's highest quality lithium mine and salt lake, with low comprehensive cost, Chengfeng project expansion and industry prosperity, and its performance has turned losses into profits and gradually improved. We expect the company to achieve an operating revenue of RMB 7.529/20.245/22.263 billion, a net profit attributable to the parent of RMB 2.067/66.27/7.293 billion, a diluted EPS of 1.40/4.49/4.94, a corresponding PE of 61.21/19.10/17.352 and a corresponding target price of RMB 108 in 2022. It will be covered for the first time and given a "buy" rating.
Risk tips
The construction of quinana project is less than expected; Subsequent debt repayment is less than expected; Downstream demand is lower than expected; The spread of the epidemic exceeded expectations
