Zangge mining ( Zangge Holding Company Limited(000408) )
Event: cangge mining released its 2021 annual report: the operating revenue in 2021 was 3.623 billion yuan, a year-on-year increase of 90.31%, of which Q4 operating revenue was 1.523 billion yuan, a year-on-year increase of 112.52% and a month on month increase of 52.71%. Deduction of non parent net profit was 1.358 billion yuan, a year-on-year increase of 599.04%, of which Q4 deduction of non parent net profit was 671 million yuan, a year-on-year increase of 40.46 times and a month on month increase of 76.76%.
Sanctions + tight supply, and the price of potash has soared again and again. In 2021, the company’s potassium chloride achieved a revenue of 2.661 billion yuan, a year-on-year increase of 45.71%. The increase is mainly due to the increase in the price of potassium salt. The price of potassium chloride of the company was 1615 yuan / ton in 2020 and 2491 yuan / ton in 2021. China is a large importer of potash, with an import dependence of more than 50%, mainly from Belarus, Canada, Russia and so on. In June 2021, the export of potassium salt from Belarus was sanctioned by the European Union, and the price of potassium salt in China soared. Russia’s potash fertilizer exports account for 19% of the world, and the situation in Russia and Ukraine also adds uncertainty to Russia’s potash import. According to the statistics of Longzhong information, at present, 57% of the price of potassium chloride in East China has exceeded 4130 yuan / ton, and the cost of potassium salt of zangge mining is only 1030 yuan / ton. The company will continue to make profits.
The cost of lithium salt business is only 35000 yuan / ton, and the performance elasticity can be expected. In 2021, the company’s lithium carbonate revenue was 946 million yuan, a year-on-year increase of 138902%. The annual output of lithium carbonate was 7553 tons, the sales volume was 10960 tons, the price per ton was 86300 yuan / ton, and the cost per ton was 34700 yuan / ton. At present, the price of lithium carbonate exceeds 500000 yuan / ton, the supply of lithium resources is tight, and the price of lithium salt is expected to remain high. The output of lithium carbonate of the company in 2022 is 10000 tons, and the performance growth is expected.
Actively distribute lithium resources + technical advantages, and the growth of the company is guaranteed. (1) Resources: the company has three lithium salt resources: Chaerhan Salt Lake, Dalangtan Salt Lake and mamico Salt Lake, with lithium resource reserves of more than 3.92 million tons (2) Technology: the company has made continuous breakthroughs in lithium technology, and the cost is only 34700 tons / yuan. The company adopts the process route of “simulated continuous adsorption → nanofiltration reverse osmosis impurity removal → one-step synthesis”, which greatly reduces the cost. (3) Production expansion: the construction of mamico Salt Lake, which has been invested and acquired, is expected to start in the second half of 2022, and the trial production will be completed in the second half of 2023, with a long-term planned capacity of 100000 tons / year. (4) Overseas layout: the company subscribes for the Private Placement Shares of super resources Co., Ltd. and holds 19.47% of the shares of the company after the private placement. The purpose is to accelerate the development and construction of Laguna Verde Salt Lake Lithium project in Argentina and implement the comprehensive layout of new energy industry.
Qulong copper mine was completed and put into operation, and the investment income of the company was 231 million yuan in 2021. The company holds 30.78% equity of Julong copper. Julong copper owns the mineral rights of Qulong Copper Polymetallic Mine, rongmutola copper mine and zhibula Copper Polymetallic Mine in Tibet, with resource reserves of 10.72 million tons of copper and 570000 tons of associated molybdenum. Julong copper is expected to produce 120000130000 tons of copper in 2022; After the first phase of the project is completed, the annual output of copper is about 160000 tons. In 2021, the investment income of Julong mine of the company was 231 million yuan. According to the feasibility study report, the unit production costs of open-pit mining and underground mining and beneficiation of zhibula Copper Polymetallic Mine were 17400 yuan / ton and 30800 yuan / ton respectively, and the unit copper production cost of Qulong Copper Polymetallic Mine was 20500 yuan / ton. The investment income of the company Julong copper is very considerable.
Investment suggestion: we expect the company’s revenue to be 6.597/65.05/6.855 billion yuan, net profit to be 4.775/50.80/5.160 billion yuan, EPS to be 2.42/2.58/2.63 yuan / share and PE to be 14.34/13.48/13.27 times from 2022 to 2024. For the first time, it was rated as “overweight”, with a 12-month target price of 46.4 yuan / share.
Risk warning: downstream demand is less than expected, project progress is less than expected, and macro factors change
