\u3000\u3 China Vanke Co.Ltd(000002) 240 Chengxin Lithium Group Co.Ltd(002240) )
Events
On the evening of March 28, the company released the performance forecast for the first quarter of 2022. In the first quarter of 2022, the company realized a net profit attributable to the parent company of 900-1.1 billion yuan, a year-on-year increase of 765.24% - 957.52%; The net profit deducted from non parent company was 895 million yuan to 1.095 billion yuan, with a year-on-year increase of 806.35% - 100889%.
Commentary
Q1 performance is in line with expectations, and the net profit per ton of lithium salt is more than 60000 yuan. In the year of 22, the net profit attributable to the parent company of Q1 was RMB 900-1.1 billion, taking the median value of RMB 1 billion. It is estimated that the output of lithium salt in Q1 is 15000 tons. It is estimated that the net profit per ton of lithium salt product in Q1 is RMB 66700. Considering the low proportion of self owned ore and the increase of concentrate price with the price of lithium salt, the performance of Q1 basically meets the expectation.
Cooperate with Guocheng group to promote the resumption of production of dangba lithium mine in Sichuan and ensure resource supply. According to the announcement, on February 23, the affiliated company of Guocheng group increased its capital by 429 million yuan to Jinxin mining, a joint-stock subsidiary of Zhonghe, and obtained 50% of its equity. Jinxin mining owns the mining right of dangba lithium mine in markang County, Sichuan Province. Its proven ore resources are 49.19 million tons, equivalent to 660900 tons of lithium oxide reserves, with a grade of 1.34%, and the licensed production scale is 850000 tons / year. At present, the mine is in a shutdown state due to Zhonghe's debt restructuring. Shengtun lithium, a wholly-owned subsidiary of the company, signed a strategic cooperation agreement with Guocheng group on March 28. The two sides intend to actively cooperate to promote the resumption of production and operation of Jinxin mining, and Guocheng group will actively promote the procurement and sales cooperation between shengtun lithium and Jinxin mining, giving priority to providing the company with lithium concentrate with an output of no less than 50%.
Lithium salt production capacity has expanded steadily, and the growth is worth looking forward to. According to the 2021 annual report, the company currently has a capacity of 28000 tons / year of lithium carbonate and 45000 tons / year of lithium hydroxide. Suining Shengxin 30000 tons of lithium hydroxide project was completed and put into operation in January 2022. At present, the trial production stage of the project is relatively smooth; The planned capacity of lithium hydroxide and lithium carbonate in Indonesia is 50000 T / A and 10000 t / A, and it is expected to be put into operation in 23 years. In terms of lithium resources, the company actively promotes the production of oyno mine project. The designed raw ore production scale of sabixing Lithium Tantalum mine project is 900000 tons / year, equivalent to about 200000 tons of lithium concentrate. It is expected to be completed and put into operation by the end of 2022.
Profit forecast & investment suggestions
With the production of Zimbabwe and Murong lithium mines in the next two years and the high price of lithium salt maintained, the company's performance increased with high certainty and great performance flexibility. The net profit attributable to the parent company for 22-23 years was increased by 25% and 30% to 5.093 billion yuan and 6.551 billion yuan respectively, with corresponding EPS of 5.89 yuan and 7.57 yuan respectively, and corresponding PE of 9 times and 7 times respectively, maintaining the "buy" rating.
Risk tips
The uncertainty of lithium salt price trend in the later stage increases; The growth rate of lithium salt demand was lower than expected.
