\u3000\u3000 Qinghai Salt Lake Industry Co.Ltd(000792) (000792)
Main points:
The lower than expected performance of Q4 is mainly related to profit and loss and accumulation.
The company’s Q4 apparent performance is lower than expected, and the net profit attributable to the parent company is expected to be 365 million yuan, down 77% month on month. The main reasons for the failure are as follows: 1) the profit and loss of 783 million yuan brought by the bankruptcy liquidation of subsidiaries + fines; 2) The decline in sales volume and accumulation of inventory affected the performance of about 637 million yuan. Under the high price situation of 22q1 potash fertilizer and lithium salt, the inventory provides sufficient guarantee for Q1 performance. After 22 years of lithium carbonate expansion of Lanke lithium industry, the beta of the industry and the alpha of Salt Lake will promote the company’s performance to a higher level.
Supply and demand are tight, and the potash business is welcoming both volume and price increases.
Resources are the king, and the tight supply and demand of potassium salt supports the upward price. Canada, Belarus and Russia are rich in potassium resources, accounting for more than 60% in total; China is relatively short of potassium ore, mainly liquid potassium resources. The high concentration of resources leads to the monopoly competition of potassium fertilizer supply, regional mismatch of supply and demand, and China’s high dependence on imports. The incremental release of potassium fertilizer production capacity is slow and the supply is tight; The Shenzhen Agricultural Products Group Co.Ltd(000061) cycle drives the potash fertilizer cycle, the price of large contracts continues to rise, and the volume and price of potash fertilizer rise simultaneously. Double guarantee of technology and resources to help the potash fertilizer leader set sail. Qinghai Salt Lake Industry Co.Ltd(000792) sitting on Qarhan’s high-quality resources, it is a leading enterprise in China’s Salt Lake development and the most important supplier of potash fertilizer in China; The production technology is advanced and the gross profit margin is leading in the country. Tight supply and demand raised the unit price, and the volume and price of potash fertilizer increased simultaneously.
High price of lithium, high-quality resources + mature technology to realize capacity realization
Low cost capacity expansion, adsorption membrane process to realize resource advantages. 1) Resource advantages. The company is backed by Chaerhan Salt Lake, and the annual discharge of old brine equivalent to lithium chloride is 200000-300000 tons. The total lithium salt production capacity of Chaerhan Salt Lake is 40000 tons, of which Lanke lithium industry accounts for 30000 tons, ranking first in China, providing resource guarantee for the development of lithium carbonate business. 2) Technical advantages. Lanke lithium took the lead in breaking through the adsorption salt lake lithium extraction method, with mature technology, and conquered the key technology of extracting lithium salt from high magnesium and low lithium brine. 3) Cost advantage. Rich resources and advanced technology are conducive to the low-cost expansion of Lanke lithium industry. Coupled with the perfect infrastructure in the mining area, mature and stable technology and the support of the “cash cow” of potash business, it is suitable for the large-scale layout of lithium industry.
Investment advice
By virtue of the prosperous accumulation of lithium + potassium resources for many years, the company has benefited from the high cost of lithium + potassium. We expect that from 2021 to 2023, the company’s net profit attributable to the parent company will be 4.003 billion yuan, 9.86 billion yuan and 11.166 billion yuan respectively, and the PE corresponding to the current market value will be 45x, 18x and 16x respectively.
Risk tips
The price of potash fertilizer and lithium carbonate is lower than the expected risk; Lithium carbonate production expansion plan is less than expected risk; Policy risks such as ecological environment protection; The management efficiency of the company is lower than the expected risk.
