Guizhou Chanhen Chemical Corporation(002895) (002895)
Event: the company announced that it had signed an investment cooperation agreement with Sunwoda Electronic Co.Ltd(300207) to establish a joint venture with a registered capital of 300 million yuan, of which CHUANHENG contributed 153 million yuan, accounting for 51%. At the same time, the company signed the investment agreement on mineralization integrated new energy material recycling industry project with Sunwoda Electronic Co.Ltd(300207) and Weng’an government.
Strong alliance to accelerate the transformation of the company in the direction of phosphorus, fluorine and lithium new energy materials: the business scope of the newly established joint venture will include phosphorus ore, lithium ore and its deep processing. The total investment of the mineralization integration project is 7 billion yuan, including 3.5 billion yuan in phase I, including 300000 tons of iron phosphate, 200000 tons of food grade purified phosphoric acid and 30000 tons of anhydrous hydrogen fluoride. It is expected to be started in December 2021 and put into operation in early 2024. The investment in phase II is 3.5 billion yuan, including 300000 tons of iron phosphate, 200000 tons of food grade purified phosphoric acid and 30000 tons of anhydrous hydrogen fluoride. It is expected to be started in 2024 and put into operation in 2025. After the production capacity is put into operation, it will further enhance the profitability of the company, establish the leading position of iron phosphate and accelerate the transformation of lithium phosphate fluoride new energy materials.
Continue to bind the lithium iron phosphate battery head company to fully demonstrate the downstream recognition: the demand for lithium iron phosphate is growing rapidly under the explosion of demand for electric vehicles and energy storage. Considering the security and stability of supply and the demand for medium and long-term cost reduction, the downstream has a strong willingness to lock in high-quality resources in the upstream while rapidly expanding production. The joint venture construction of upstream phosphorus chemical enterprises with downstream head enterprises is also conducive to accelerating the release of production capacity, ensuring product sales and continuous process upgrading and optimization. Previously, the company announced that it would jointly build no less than 500000 tons of iron phosphate with GuoXuan group in Fuquan, Guizhou, and jointly build lithium dihydrogen phosphate project with Mianyang Fulin Precision Co.Ltd(300432) . This cooperation with Sunwoda Electronic Co.Ltd(300207) is the company’s second mineralization integrated base based on the development of Weng’an LAOHUDONG Phosphate Mine held by Tianyi mining, a 49% shareholding subsidiary of the company. The reserve of LAOHUDONG phosphate mine is 370 million tons, The design capacity is 5 million tons / year, and infrastructure construction is under way. We believe that CHUANHENG has significant advantages in cost and continuous production expansion capacity by virtue of its independent development model of high-grade phosphorus ore resources in Guizhou, semi aqueous wet process phosphoric acid production process and mineralization.
Profit forecast and investment suggestions: we expect the net profit attributable to the parent company from 2021 to 2023 to be RMB 350 million, RMB 660 million and RMB 1.02 billion respectively, corresponding to 46, 25 and 16 times PE respectively. We are firmly optimistic about the transformation of the company’s new energy materials with large growth space. We maintain the “buy” rating and continue to firmly recommend!
Risk tip: the production capacity launch progress is less than expected, and the phosphate rock price has fallen sharply.
