\u3000\u3 China Vanke Co.Ltd(000002) 240 Chengxin Lithium Group Co.Ltd(002240) )
The company released the annual report of 2021: the revenue was 2.934 billion yuan, a year-on-year increase of + 63.88%; The net profit attributable to the parent company was 851 million yuan, a year-on-year increase of + 303029%, which was in line with the previous performance forecast of 830920 million yuan; The net profit deducted from non parent company was 862 million yuan, a year-on-year increase of + 479.05%, and the data was also in line with the previous performance forecast of 848938 million yuan. The company achieved a revenue of 1.075 billion yuan in 21q4, a year-on-year increase of + 244.93% and a month on month increase of + 48.07%; The net profit attributable to the parent company was 312 million yuan, a year-on-year increase of + 143653% and a month on month increase of + 26.32%; The net profit deducted from non parent company was 350 million yuan, with a year-on-year increase of + 124463% and a month on month increase of + 41.70%. In 2021, the company’s lithium salt production line operated well, basically achieving full production and full sales. The annual output of lithium salt products was 40200 tons, a year-on-year increase of + 90.10%; The sales volume was 42000 tons, a year-on-year increase of + 108.54%.
The company released the performance forecast for the first quarter of 2022: it is expected to realize the net profit attributable to the parent company of RMB 900-1.1 billion, with a year-on-year increase of 765.24% – 957.52%; The net profit deducted from non parent company was 8951095 million yuan, with a year-on-year increase of 806.35% – 100889%. The company’s performance in the first quarter of this year still achieved leapfrog growth compared with the fourth quarter of last year, and basically realized the thickening of profits brought by the rapid rise of lithium price.
Deeply focus on the main business of lithium salt and speed up the upstream and downstream layout of the industrial chain. At present, the company has established four lithium product production bases and four lithium resource end layouts all over the world. Four lithium product production bases: 1) Zhiyuan lithium industry has an annual output of 40000 tons of lithium salt, with full production and sales capacity; 2) Suiningsheng’s new year production capacity of 30000 tons of lithium hydroxide was completed and put into operation in January 2022; 3) Indonesia Shengtuo lithium salt production capacity with an annual output of 60000 tons is under construction. It is expected to be completed and put into operation in 2023, and the products are mainly for overseas customers; 4) Shengwei lithium industry has built a capacity of 400 tons of metal lithium. Layout of four lithium resource terminals: 1) the raw ore production scale of yelonggou spodumene mine in Jinchuan county is 405000 tons / year, equivalent to about 75000 tons of lithium concentrate; 2) Participate in 25.19% equity of Huirong mining in Yajiang County, Sichuan Province, and Huirong mining owns the exploration right of Murong lithium mine; 3) It holds 51% equity of sabixing lithium mine project in Zimbabwe, and the preliminarily planned raw ore production scale 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; 4) The current capacity of SESA project in Argentina is 2500 tons of LCE, which is in normal production. In addition, the company recently plans to introduce Byd Company Limited(002594) as a strategic investor.
Risk warning: insufficient supply of raw materials; Falling product prices; Production and sales did not meet expectations.
Investment suggestion: raise the profit forecast and maintain the “buy” rating. The profit forecast is raised. It is estimated that the company’s revenue from 2022 to 2024 will be RMB 17.9272597631206 billion respectively, with a year-on-year growth rate of 51.0/44.9/20.1%, and the net profit attributable to the parent company will be RMB 3.915/54.47/6.191 billion respectively, with a year-on-year growth rate of 360.2/39.1/13.7%; Diluted EPS is 4.52/6.29/7.15 yuan respectively, and the corresponding PE of the current stock price is 12 / 9 / 8x. The company focuses on the lithium salt business, with the rapid expansion of production capacity in the midstream. The upstream has its own mines and signs a long-term single underwriting agreement for raw materials. The downstream has successfully entered the supply chain of core battery enterprises outside China. There is still great growth potential in the future. With the improvement of the prosperity of the lithium industry, the company’s performance has ushered in an outbreak period and maintained the “buy” rating.
