Tibet Mineral Development Co.Ltd(000762) (000762)
Event: on January 1, 2021, the company announced that it planned to implement the equity incentive plan, with a total of no more than 40 incentive objects, accounting for 6.87% of all employees; The number of restricted shares to be granted is 489800 shares, accounting for 0.09% of the total share capital of the company. The first grant shall not exceed 409800 shares, accounting for 83.7% of the total grant. The source of restricted shares is the directional issuance of A-share common shares by the company to incentive objects; The initial grant price is 26.39 yuan / share. The sales restriction period is 24 months after the grant, and 36 months after the expiration of the sales restriction period is the lifting of the sales restriction. The proportion of lifting the sales restriction is 33% / 33% / 34% respectively.
Equity incentive is bound to the backbone of core employees, and the determination of the company’s mechanism reform is beginning to show. The grant objects of this equity incentive are mainly middle and senior managers and core technical backbones of the company. The scope of granted personnel is wide. The performance assessment objectives fully reflect the balance between incentive and constraint, and the assessment objectives fully test three core financial indicators: 1) growth ability: Based on 2020, the CAGR of operating income from 2022 to 2024 shall not be less than 32% / 44% / 41% respectively; 2) Profitability: from 2022 to 2024, the return on net assets shall not be less than 5% / 8% / 10%, and the per capita profit shall be more than RMB 11 / 13 / 150000; 3) Revenue quality: the turnover days of two funds from 2022 to 2024 are less than 130 / 120 / 105 days. The company establishes a business community between the company and employees through this equity incentive, which is expected to fully stimulate the vitality of the company and the enthusiasm of employees.
Baowu Funeng opens the development vitality of the company and is expected to build the core ballast of China’s low-cost lithium battery supply chain. Since the company released the 10000 ton lithium salt development plan in August, it has made steady progress along the established objectives, and successively signed the contracted operation contract (EPC + O), photovoltaic + photothermal cogeneration function contract (BOO) and 100 ton lithium hydroxide pilot test contract for Zabuye phase II lithium carbonate construction project. The full cost of phase II lithium carbonate is comparable to that of salt lake. Baowu Fu, a central enterprise, can fully stimulate the development vitality of the company, Build China’s low-cost lithium extraction model project in salt lakes, and at the same time, it has the advantages of resource integration in Tibet. It is planned to reach 30000 tons of lithium salt production capacity in 2025.
In 2022, the gap between supply and demand will continue to enlarge, and the company is expected to enjoy the long-term high prosperity dividend of the industry. It is estimated that in 2022, the global new supply will be 167000 tons of LCE, with a year-on-year increase of 30.8%, while the demand will increase by 177000 tons of LCE, with a year-on-year increase of 30.6%, and the supply-demand gap will reach 43000 tons of LCE. In 2023, it will still maintain a tight balance, giving birth to the phenomenon that the spot price of “ore → lithium salt” is easy to rise but difficult to fall. At present, the price of lithium salt has reached a high level of 280000 yuan / ton, and it is expected to hit the front line of 350000 yuan / ton in the future. Under the background of China’s countercyclical advanced investment, the demand for new energy is expected to exceed the expected volume, and the gap between supply and demand will continue to enlarge. The company holds the core resource & large capacity, with high certainty, and is expected to enjoy the long-term high prosperity dividend of the industry.
Investment suggestion: the company’s production expansion plan is advancing steadily. Under the background of high lithium price, the future profit is expected to be further thickened. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 183 million, RMB 294 million and RMB 373 million, and the corresponding PE will be RMB 151.5 million, RMB 94.2 million and RMB 74.1 million respectively. The company has the potential to further develop its hand resources, and is expected to further integrate the development of salt lake resources in Tibet with the support of the autonomous region government to maintain the company’s “buy” rating.
Risk warning: price fluctuation risk of lithium salt products; The risk of the epidemic affecting end consumer demand; Risk that the landing and commissioning of phase II project are less than expected; Chromite price fluctuation risk
