\u3000\u3 China Vanke Co.Ltd(000002) 240 Chengxin Lithium Group Co.Ltd(002240) )
Event: on March 22, 2022, the company announced that it planned to introduce Byd Company Limited(002594) as a strategic investor through non-public offering of shares, and Byd Company Limited(002594) will hold more than 5% of Chengxin Lithium Group Co.Ltd(002240) shares after the issuance.
Join hands with Byd Company Limited(002594) , to build a model of industrial chain coordination. Shengxin and Byd Company Limited(002594) also signed a strategic cooperation agreement: (1) Byd Company Limited(002594) will include Shengxin into the list of suppliers for long-term strategic cooperation, and will give priority to procurement under the same conditions. (2) Byd Company Limited(002594) if there are lithium ore resources that need to be processed by a third party, Shengxin will be entrusted with processing priority under the same conditions. (3) Byd Company Limited(002594) provide guidance to Shengxin on new technologies and processes of lithium batteries. (4) The two will jointly seek high-quality mineral resources for cooperative development and obtain lithium related resources. (5) Byd Company Limited(002594) will assist Shengxin in developing partners in the field of lithium battery industry and help Shengxin expand the market through its own brand influence.
Lithium salt project is gradually put into operation, with high certainty of future growth. The existing capacity of the company is 25000 tons of lithium carbonate, 15000 tons of lithium hydroxide and 30000 tons of Suining Shengxin, which have been completed and put into operation in January 2022. Indonesia (IMP) 60000 tons of lithium salt project is expected to be put into operation in 2023. The equity capacity of lithium salt of the company is expected to be 604 / 73400 tons from 2022 to 2023. The company introduces war investment Byd Company Limited(002594) . On the one hand, the company cooperates with LG, Ningde and Byd Company Limited(002594) to ensure the sales of lithium salt in the future. On the other hand, raising 3 billion funds is conducive to the promotion of mine development and production expansion projects, and the growth certainty of the company is high.
Underwriting + self mining, the company’s lithium resources are guaranteed. Shengxin’s existing lithium mines include yelonggou, taiyanghekou, Murong and sabixing Lithium Tantalum mines, with an equity resource of 430000 tons of LCE equivalent. At present, the company has a capacity of 75000 tons of yilonggou lithium concentrate, and the progress of Murong and sabixing is expected to exceed expectations in the future. The company signed a long-term agreement with Galaxy resources and avz to underwrite 60000 tons and 160000 tons of lithium concentrate. The company also has the right to operate sdla Salt Lake, with a production capacity of 2500 tons of LCE equivalent. The company has a global layout of lithium resources and guaranteed raw material supply.
Industrial chain coordination is expected to become a trend and build a win-win upstream and downstream. The high price of lithium has affected the normal production of downstream, and the Ministry of industry and information technology began to call for direct connection between upstream and downstream. Overseas Tesla and others continue to sign nickel lithium supply contracts; China Ningde and GuoXuan are also expanding upstream to ensure resource supply. In the future, industrial chain integration is expected to become a trend, the downstream raw materials are guaranteed, and the upstream growth attribute is strengthened to form a win-win situation.
Investment suggestion: we are optimistic about the large amount of lithium salt in Shengxin in the future, and the growth certainty of the company is high. It is estimated that the net profit attributable to the parent company from 2021 to 2023 is RMB 878 / 3859 / 4287 million, the corresponding EPS is RMB 1.17/5.15/5.72, and the corresponding PE is 46.63/10.61/9.55 times. For the first time, give a “buy” rating.
Risk tip: the demand is less than expected, and the lithium price falls sharply.
