\u3000\u3 China Vanke Co.Ltd(000002) 738 Sinomine Resource Group Co.Ltd(002738) )
Core view
The company released the main business data report from January to February 2022: the company has good production and operation. The newly-built 25000 ton battery grade lithium hydroxide and battery grade lithium carbonate production line reached production capacity in November 2021, and the reconstruction and expansion of 6000 ton lithium fluoride production line of the company has been completed. As the new production capacity releases new output, the price of lithium salt products rises, and the profitability of the company is significantly improved year-on-year. According to the preliminary accounting of the company, from January to February 2022, the company achieved an operating revenue of about 1.127 billion yuan, with a year-on-year increase of about 417.70%; The net profit attributable to the parent company was 486 million yuan, with a year-on-year increase of about 117012%. The company’s operating performance has achieved rapid growth.
Lithium mine and lithium salt business is expected to make the company’s performance continue to achieve leapfrog growth this year. For lithium fluoride business, the company’s 6000 T / a battery grade lithium fluoride reconstruction and expansion project has been completed by the end of 2021. The price of lithium fluoride mainly rises with the rise of the price of lithium carbonate. Therefore, in the upward cycle of lithium price, the profit of a single ton of products will also increase significantly. In 2021, the company’s 3000 t / a battery grade lithium fluoride production capacity basically reached the state of full production and full sales. It is expected that on this basis, with the release of new production capacity this year, it is still expected to achieve high growth.
Lithium hydroxide / lithium carbonate business: the company’s annual output of 25000 tons of battery grade lithium hydroxide / lithium carbonate production line has been completed in August 2021 and successfully ignited, put into trial production and operation, and reached production in November 2021. It is expected to release most of the production capacity this year. In addition, the company plans to invest in a high-purity lithium salt project with an annual output of 35000 tons, with a total investment of about 1 billion yuan.
In terms of lithium salt resource guarantee: the technological transformation and recovery project of spodumene mining and beneficiation system with an existing processing capacity of 120000 tons / year in Tanco mine in Canada has been officially put into operation on October 15, 2021. Part of the first batch of self-produced lithium concentrate has arrived in China, and the company is actively promoting the open-pit mining scheme in Tanco mine. In addition, the company plans to acquire bikita lithium mine project in Zimbabwe, which is a mine in production. The main products are technical lithium permeable feldspar concentrate and cesium garnet concentrate, and the beneficiation capacity is 700000 tons / year. According to the original feasibility study report, bikita lithium mine plans to build a mining and beneficiation project with an annual processing capacity of 1.05 million tons. The product is spodumene. The company plans to optimize the feasibility study after the completion of project delivery. In addition, the company shares in Canadian power metals, and its lithium projects will be used as the company’s prospective resource reserves.
Risk warning: the market demand for cesium rubidium salt and lithium salt does not meet expectations; The company’s production expansion progress is lower than expected.
Investment suggestion: raise the profit forecast and maintain the “buy” rating.
The profit forecast is raised. It is estimated that the revenue from 2021 to 2023 will be RMB 24.95/110.58/13.56 billion, with a year-on-year growth rate of 95.6% / 343.2% / 22.6%, and the net profit attributable to the parent company will be RMB 533 / 2810 / 4837 million, with a year-on-year growth rate of 206.1% / 426.8% / 72.1%; The current diluted share price is 64.87 yuan, corresponding to eps.64/11. Considering that the company has achieved the absolute advantage of lithium / hydrogen oxide battery in the global market, and is expected to maintain the market share of lithium-ion battery in the field of lithium-ion and lithium-ion carbonate after the purchase of lithium-ion battery.
