Tibet Mineral Development Co.Ltd(000762) (000762)
Event overview: the company issued the restricted stock incentive plan (Draft), which plans to grant no more than 489800 shares (accounting for 0.09% of the total share capital of the company) to no more than 40 people (accounting for about 6.87% of all employees), including no more than 409800 shares for the first time, the grant price is 26.39 yuan / share, and the sales restriction period is 24 months.
Analysis and judgment:
The performance assessment conditions are clear, which is conducive to mobilizing the enthusiasm of employees. We believe that the incentive plan has the following highlights: 1) set a clear performance evaluation goal. The assessment objective is that in 2022 / 23 / 24, roe shall not be less than 5%, 8% and 10% respectively, compound growth rate of revenue and income shall not be less than 32% / 44% / 41% respectively compared with 2020, per capita net profit shall not be less than 11 / 13 / 150000 respectively, turnover days of two funds shall be less than 130 / 120 / 105 days respectively, and lithium salt (Salt Lake) in China accounts for 5% / 10% / 13%. 2) It is conducive to mobilizing the enthusiasm of employees. The plan covers the company’s senior executives, core personnel and technical backbone, which is conducive to ensuring the stability of the core team, linking the company’s interests, personal interests and performance objectives, and mobilizing the enthusiasm of talents.
Backed by Baowu group, one of the best salt lake resources in China will usher in accelerated development. 1) The controlling shareholder of the company is Baowu group, and the actual controller is SASAC of the State Council. The development of the company has been fully supported by Baowu. 2) Zabuye Salt Lake, the company’s world-class high-quality salt lake, has superior resource endowment, and lithium products rank among the top in the world. At present, the reserves are being re verified, and the updated resource reserves in the future are expected to exceed expectations. 3) At present, the company has a capacity of 7000 tons of lithium carbonate concentrate in phase I, and the preparations for phase II are progressing smoothly. It cooperates with East China Engineering Science And Technology Co.Ltd(002140) in the form of EPC + O. at the same time, it has agreed on the liability for the delay of the construction period of the EPC Contract and the breach of the operation contract, which may ensure that the project can be put into operation as planned. According to the company’s announcement, 12000 tons of lithium carbonate capacity may be completed and put into operation in 2023, The development of Zabuye has been greatly accelerated.
Excellent resource endowment brings significant cost advantages and will greatly benefit from the current round of lithium price rise. According to the feasibility study calculation, the full cost of phase II project after deducting depreciation and various expenses is 42500 yuan / ton, and the full cost after deducting by-product income (deducting depreciation and various expenses) reaches 24100 yuan / ton. The lithium extraction cost is lower than that of Qinghai Salt Lake, and is on the left side of the global lithium extraction cost curve. Benefiting from the mismatch between the substantial growth of downstream demand for new energy and the capital expenditure rate of upstream lithium resources, we believe that the duration of this round of lithium price cycle and the height of lithium price center are expected to continue to exceed expectations. Zabuye Salt Lake, as one of the lowest cost Salt Lake Lithium extraction projects in the world, is expected to benefit significantly.
In the future, as the leader of green comprehensive development and utilization of mineral resources in the Qinghai Tibet Plateau, China’s local high-quality lithium resources will be strategically reassessed. The company’s strategic goal is to produce 5000 tons of lithium carbonate in 2022, no less than 10000 tons in 2023, 17000 tons in 2024 and no less than 30000 tons in 2025-2026. The plan will be further revised according to the requirements of China’s Baowu and autonomous region government, which is expected to significantly benefit from the strategic opportunity of China’s local lithium resource development, The revaluation of lithium extraction from China’s local salt lakes needs to be viewed from a strategic perspective.
Investment suggestion: we expect that the net profit attributable to the parent company from 2021 to 2023 will be RMB 221 / 311 / 464 million in turn, corresponding to the closing price of RMB 53.13 on December 31, 2021, and PE will be 125 / 89 / 60 times in turn from 2021 to 2023. Considering the stable gross profit contributed by the company’s high-quality chromite resources, Zabuye phase II salt lake lithium extraction project opens up future growth space and covers it for the first time, Give the company a “recommended” rating.
Risk warning: the terminal demand is less than expected; Lithium prices fell sharply; The project is not progressing as expected.
