\u3000\u3 China Vanke Co.Ltd(000002) 738 Sinomine Resource Group Co.Ltd(002738) )
After 4 years of transformation and layout, it has finally become a popular lithium salt enterprise. Since 2018, the company has acquired Dongpeng new materials and Canada Cabot special fluid division, successfully cut into the processing of rare light metals such as lithium, cesium and rubidium from the geological exploration business, and completed the layout of the industrial chain of “geological exploration + resources + lithium salt / cesium and rubidium salt processing”. In 2022, the company acquired bikita mine and built a 35000 ton lithium salt expansion project. The project was carried out smoothly. The company will have 1.13 million tons of LCE equivalent lithium resources, 60000 tons of lithium salt + 6000 tons of lithium fluoride capacity, and become a popular enterprise of lithium salt.
25000 tons of production in progress + 35000 tons of expansion, the company’s performance shift lithium salt business. In August 2021, the company’s phase I 25000 ton lithium salt project was completed and put into operation. It is expected that the company will achieve an output of 25000 tons in 2022 / 2023. In 2022, the company plans to build a 35000 ton lithium salt project, which is expected to be completed and put into operation by the end of 2023. At that time, the company will have a capacity of 60000 tons of lithium salt. The company’s performance shifted to lithium salt business and entered a stage of rapid development.
Strengthen the layout of lithium resources in the upstream, and it is expected that the lithium self-sufficiency rate will reach 83%. At present, the company’s Tanco mine has a beneficiation capacity of 120000 tons, which will be expanded to 300000 tons in 2022, and is expected to achieve a beneficiation capacity of Shanghai Pudong Development Bank Co.Ltd(600000) tons in 2025. Bikita mine currently has a beneficiation capacity of 700000 tons, and the company is planning to expand production. It is estimated that the self-sufficiency rate of lithium resources of the company will reach 83% in 2025, which can basically cover its own 60000 tons of lithium salt production. Meanwhile, in December 2021, the company subscribed for 5.72% equity of PWM and obtained the underwriting agreement for all lithium, cesium and tantalum products of PWM case Lake project, so as to further ensure the supply of lithium resources in the future.
Both supply and demand increased, and global lithium resources are expected to maintain a tight balance. Supply: thanks to the high popularity of the lithium industry, the global lithium mines and lithium salt lakes have expanded their production. We expect the global lithium production to reach 1.49 million tons in 2025. Demand: with the rapid and large-scale production of new energy vehicles and the trend of carbon neutralization, the demand for renewable energy driven energy storage continues to grow. It is estimated that the global demand for lithium will reach 1.53 million tons in 2025. From 2022 to 2025, the global lithium shortage is 5 / 1 / 2 / 40000 tons, which is in a tight balance.
The production capacity of lithium fluoride doubled to consolidate its leading position, and the prosperity of the downstream expansion industry was high. In 2021, the company successfully expanded the production capacity of lithium fluoride from 3000 tons to 6000 tons, ranking first in China. The company’s lithium fluoride has steadily entered the Tesla supply chain through the supply of Japanese Morita chemical. The downstream lithium hexafluorophosphate continues to expand production, and the production capacity is expected to increase by 52.5% in 2022. As a leader in the industry, the company will further benefit from the high popularity of lithium hexafluorophosphate.
Monopolize global cesium and rubidium resources and enjoy excess profits. Cesium rubidium salt is widely used in medical and pharmaceutical, aerospace, 5g communication, oil and gas drilling, fine chemical and other fields. Its irreplaceable and excellent performance have been highly recognized and used on a large scale in relevant fields. At present, the company has the world’s only two cesium and rubidium mines in production, Tanco and bikita. The cesium reserve of Tanco mine is 42200 tons of cesium oxide. The company enjoys the excess return brought by monopoly position. At the same time, with the continuous rise of oil prices and the gradual increase of global oil and gas exploration, the company’s cesium formate orders continue. The company’s Cesium rubidium salt and cesium formate businesses are expected to maintain a growth rate of more than 30% in the future.
Investment suggestion: it is estimated that the company will achieve revenue of RMB 1.878/87.10/9.810 billion from 2021 to 2023, with a year-on-year increase of 47.2% / 363.8% / 12.6%; The net profit attributable to the parent company was 518 / 3408 / 4405 million yuan, with a year-on-year increase of 197.2% / 558.0% / 29.2%, corresponding to EPS of 1.69/11.12/14.38 yuan / share and PE of 56.91/8.65/6.69 times. Compared with the current valuation of lithium salt enterprises, the valuation of the company is at a low level. It is estimated that the market value of the company will reach 44.1 billion and the corresponding share price is 144 yuan / share, maintaining the “buy” rating.
Risk tip: the expansion of production is less than expected, the lithium price fluctuates sharply, the downstream demand is less than expected, and the macroeconomic policy changes.
