Guizhou Chanhen Chemical Corporation(002895) (002895)
Conclusions and recommendations:
Event: the completion of the company’s capital increase to Wanpeng company will help expand the company’s cooperation scope in the field of new energy materials and help the company extend from phosphorus chemical industry to new energy field. The company, Sichuan Lanjian investment and Chen Yong jointly increased the capital of Sichuan Wanpeng company, with a total amount of 130 million yuan. The company subscribed 60 million yuan for capital increase, holding 30%, and Lanjian investment subscribed 60 million yuan for capital increase, holding 30%.
In the first three quarters of the year, the company realized a main revenue of 1.671 billion yuan, yoy + 30.38%; The net profit attributable to the parent company is 212 million yuan, yoy + 48.56%; Deduct non net profit of RMB 195 million, yoy + 61.05%; The Q3 single quarter revenue was 666 million yuan, yoy + 39.54%; Net profit attributable to parent company: 107 million yuan, yoy + 79.29%; Deduct 105 million yuan of non net profit, yoy + 154.63%. The company is a leading enterprise of feed grade calcium dihydrogen phosphate and fire-fighting monoammonium phosphate in China. In recent years, the company has continuously arranged the fields of upstream phosphate rock and downstream new energy materials. The subsequent growth momentum is sufficient and the potential is huge. It is covered for the first time and is rated as “buy”.
Capital increase, layout of lithium iron phosphate and improvement of the industrial chain of new energy materials: Yibin Wanpeng times Technology Co., Ltd., a wholly-owned subsidiary of Wanpeng company, plans to invest in the construction of lithium iron phosphate cathode material project with an annual output of 100000 tons. The project has completed the project initiation and filing, the preparation of feasibility study report and energy-saving report, and the approval procedures of energy assessment, environmental assessment and safety assessment are being carried out. The capital increase will help the company expand and extend in the field of new energy materials industry. In addition to the phosphate rock, iron phosphate and other projects arranged by the company in the early stage, the company will have a complete industrial chain of “phosphate rock phosphoric acid / monoammonium industrial phosphate iron phosphate lithium iron phosphate”, with the competitive advantage of resource integration.
The industrial chain is highly prosperous, and the company is expected to fully benefit: in the past 21 years, driven by the demand for lithium iron phosphate batteries, the landscape of phosphorus chemical industry chain has continued to improve. At present, the price of lithium iron phosphate is 90000 yuan / ton, yoy157%, and the price of iron phosphate is 23000 yuan / ton, yoy + 92%. Previously, the company took the lead in layout and signed cooperation agreements with GuoXuan holdings and Mianyang Fulin Precision Co.Ltd(300432) to jointly develop and cooperate with upstream materials of new energy batteries. In addition, the company also signed the investment cooperation agreement with Fuquan Municipal People’s government, which is expected to invest 10 billion yuan in the construction of new energy materials industry projects in two phases. The first phase is expected to invest 4.5 billion yuan to build 600000 tons of iron phosphate, 20000 tons of lithium hexafluorophosphate, 100000 tons of food grade purified phosphoric acid and supporting upstream raw materials projects. Among them, the construction of phase I 50000 tons of lithium iron phosphate will be completed in April 22, and the production capacity will be released when the prosperity of the industry remains high. It is expected that the company will fully benefit.
Layout of upstream phosphate rock to ensure future growth: after years of mining, China’s rich ore resources are continuously consumed, and the overall grade of phosphate rock has an obvious downward trend. Coupled with the increase of environmental protection pressure, the operating rate of phosphate rock in China has been further reduced. Under the background of continuous promotion of environmental protection supervision and supply side reform, the shortage of phosphate rock supply will become the norm. The future release capacity of jigongling and LAOHUDONG phosphate mines planned in advance by the company will reach 7.5 million tons. With the existing capacity of 3 million tons of Xiaoba mine and Xinqiao phosphate mine, the capacity of the company’s four phosphate mines will exceed 10 million tons and the total reserves will reach 530 million, which is expected to maintain the company’s long-term growth and development.
Profit forecast: the company takes the lead in the field of new energy materials, superimposes the advantages of the whole industrial chain of “phosphate rock phosphoric acid iron phosphate lithium iron phosphate”, and is expected to enjoy the double improvement of performance and valuation under the leadership of new energy materials. It is estimated that the net profit in 2021 / 22 / 23 will be RMB 332 / 609 / 942 million, yoy + 133% / + 83% / + 55%, equivalent to EPS of RMB 0.68/1.25/1.93. At present, the corresponding PE of A-share price is 49 / 27 / 17 times, which is covered for the first time and given a “buy” rating.
Risk tips: 1. The company’s product price is lower than expected; 2. The release of new capacity is less than expected;
