Zangge mining ( Zangge Holding Company Limited(000408) )
Event: cangge mining released its 2021 annual report. In 2021, the operating revenue was 3.623 billion yuan, a year-on-year increase of 90.31%, of which 2021q4 operating revenue was 1.523 billion yuan, a year-on-year increase of 112.52% and a month on month increase of 52.71%. In 2021, the net profit attributable to the parent company was 1.427 billion yuan, with a year-on-year increase of 523.60%, of which the net profit attributable to the parent company in 2021q4 was 602 million yuan, with a year-on-year increase of 227.68% and a month on month increase of 58.64%. In 2021, the net profit not attributable to the parent company was 1.358 billion yuan, a year-on-year increase of 599.04%, of which 671 million yuan was deducted in 2021q4, a year-on-year increase of 40.46 times and a month on month increase of 76.76%.
Lithium salt business volume and price increase simultaneously, the cost is low, and the elasticity can be expected. The annual net profit of Zangger lithium industry was 458 million yuan, turning losses into profits over the previous year: (1) volume: the annual output of lithium carbonate in 2021 was 7553.1 tons, with a year-on-year increase of + 444.4%, mainly due to the production and stable operation of 10000 tons of lithium carbonate production line, with a sales volume of 109602 tons, with a year-on-year increase of + 70.5%, mainly due to the increase of output and the decrease of inventory from 4244.2 tons in 2020 to 675 tons, of which the output of Q4 was 1981.2 tons and the sales volume was 2570 tons. (2) Price: the annual price of lithium carbonate is 86000 yuan / ton (excluding 98000 yuan / ton of tax rules), the production cost is 34700 yuan / ton, the net profit per ton is about 42000 yuan / ton, the demand for new energy is uncertain, the supply of lithium resources is tight, and the average price of SMM battery grade lithium carbonate has exceeded 500000 yuan / ton. The price of lithium is expected to maintain a high momentum. The company’s output guideline in 2022 is more than 10000 tons, Or continuously release performance.
The price of potash fertilizer has increased significantly, and the profit per ton is considerable. 1) Volume: the company’s potash fertilizer production capacity is 2 million tons / year, and the annual production and sales volume are 1.078 million tons and 1.068 million tons respectively, with a year-on-year increase of – 3.34% and – 5.55%. It is expected to maintain the potassium chloride production scale of more than 1 million tons in 2022. 2) Price: the annual price of potash fertilizer is 2491 yuan / ton, with a year-on-year increase of + 54.3%. The annual profit of Zanger potash fertilizer is 1 billion yuan, and the net profit per ton is about 937 / ton, with a significant year-on-year increase. Due to the limited new capacity of the international potash fertilizer giant, the shortage of shipping capacity and the sanctions imposed by the United States on Belarus, it is expected that the global potash fertilizer market price may remain high in 2022, and the net profit per ton may continue to increase.
Deeply cultivate Chaerhan Salt Lake and actively distribute other lithium resources. (1) At present, the company has the potassium salt mining right of Qarhan Salt Lake, covering an area of 724.35 square kilometers, and the exploration right of Dalangtan Heibei potassium salt mine of Mangya Administrative Committee of Qinghai Province, covering an area of 492.56 square kilometers. (2) The company subscribed for 47.08% of the equity of the Tibetan Youth Fund. The Tibetan Youth Fund holds 51% of the equity of mamico mining. Mamico mining holds the lithium boron ore exploration certificate of mamico Salt Lake mining area in Ali Gaize County, Tibet. At present, it has obtained the allocation number of the mining certificate. The mining area is 115.36 square kilometers, the lithium resource is converted into 2180000 tons of lithium carbonate, and the average grade is about 568304 mg / L of lithium chloride, According to the investor survey minutes published by the company, the lithium extraction project of mamico Salt Lake is expected to start construction in the second half of 2022 and complete trial production in the second half of 2023. (3) The company signed a strategic cooperation agreement with super resources to carry out investment cooperation on lagunaverde Salt Lake Lithium project in Argentina. The company subscribed for the directional additional shares of super resources and held 19.47% of the shares of the company after the additional shares, so as to promote the development process of lagunaverde Salt Lake project. (4) The company plans to increase the registered capital of Zangger Jiajin and Zangger resources, the wholly-owned subsidiaries of equity acquisition, and invest funds to start the in-depth exploration of salt lake resources. In addition, it will continue to carry out the M & A of new projects and strive to make substantive progress. It plans to add 1-2 million ton lithium carbonate reserves Salt Lake Lithium projects.
Julong copper’s investment income can be expected. The company holds 30.78% of the equity of Julong copper. In 2021, the investment income was confirmed to be 230 million yuan (including the expected credit loss of 144 million yuan). The beneficiation system of Qulong Copper Mine phase I project was officially put into production on December 27, 2021. With the output of zhibula copper mine, Julong copper is expected to produce 120000130000 tons of copper in 2022, and the annual output of copper after the phase I project is completed is about 160000 tons, It is planned to implement phase II and phase III projects in stages, and it is expected to achieve a scale of about 200 million tons of ore per year in the long term.
Investment suggestion: we expect the company’s operating income to be 7.20 billion yuan, 7.581 billion yuan and 8.245 billion yuan respectively from 2022 to 2024, and its net profit to be 4.649 billion yuan, 4.877 billion yuan and 5.317 billion yuan respectively, with corresponding EPS of 2.94, 3.09 and 3.36 yuan / share respectively. At present, the corresponding share price of PE is 11.8, 11.3 and 10.3 times. For the first time, it is rated as “overweight-a”, with a 6-month target price of 40 yuan / share.
Risk tip: lithium price is lower than expected, demand is lower than expected, and project progress is lower than expected
