With the annual report of Ganfeng Lithium Co.Ltd(002460) released by China’s lithium battery giant with a market value of nearly 180 billion, the report card of the lithium battery industry has also entered the peak of release.
According to the statistics of the shell finance reporter of the Beijing News, as of the morning of March 31, 60 lithium battery concept stocks had released the 2021 annual report, and the net profit growth rate of Ganfeng Lithium Co.Ltd(002460) as high as 410.26% can only rank ninth.
Affected by the rapid development of the new energy vehicle industry, the surge in demand for lithium batteries, the short supply of lithium products and other factors, lithium battery concept stocks made a lot of money last year. So far, the net profit of five lithium battery stocks has increased by more than 10 times, the net profit of 34 lithium battery stocks has doubled, and the growth of the top three is even more dazzling – Guangdong Tonze Electric Co.Ltd(002759) net profit has increased by 701134% year-on-year, and Chengxin Lithium Group Co.Ltd(002240) net profit has increased by 303029% year-on-year Shenzhen Dynanonic Co.Ltd(300769) net profit increased by 291883% year on year.
Although many lithium battery concept stocks have not released annual reports, according to the performance forecast, they also have the potential to hit the top of the “money making list” of the lithium battery industry. For example, Tianqi Lithium Corporation(002466) is expected to have a maximum increase of 230% in net profit and Zhejiang Huayou Cobalt Co.Ltd(603799) is expected to have a maximum increase of 260% in net profit.
Huaan Securities Co.Ltd(600909) believes that as the demand side is driven by the field of new energy, the demand for lithium will maintain rapid growth and is expected to continue to exceed market expectations. On the supply side, the production expansion of leading lithium resource suppliers such as overseas salt lakes and Australian lithium mines is slow, the release of production capacity needs time to be verified, and the supply increment in the next 2-3 years is limited. It is estimated that from 2021 to 2023, the lithium supply shortage will be 10000, 14000 and 8000 tons of LCE “Lithium supply and demand is expected to be in a tight balance, the high outlook continues, and the lithium price center remains high supported by the relationship between supply and demand”.
\ impact on the “money making list”
According to the reporter’s statistics, so far, the net profit of 5 lithium battery stocks has increased by more than 10 times, and the net profit of 34 lithium battery stocks has doubled.
Ganfeng Lithium Co.Ltd(002460) 3 on March 30, the report card was quite bright. In 2021, the company achieved a revenue of 11.162 billion yuan, an increase of 102.07% year-on-year; The net profit attributable to the parent company was 5.228 billion yuan, a year-on-year increase of 410.26%; Non net profit deducted was 2.907 billion yuan, a year-on-year increase of 622.76%; The basic earnings per share is 3.73 yuan / share.
However, the transcripts of lithium battery stocks in 2021 are generally good, and the increase of net profit of Ganfeng Lithium Co.Ltd(002460) can only rank ninth among lithium battery stocks for the time being.
The “profit king” of lithium battery in 2021 should be Guangdong Tonze Electric Co.Ltd(002759) .
Guangdong Tonze Electric Co.Ltd(002759) 2021 achieved an operating revenue of 2.253 billion yuan, a year-on-year increase of 203.24%; The net profit attributable to the parent company was 745 million yuan, a year-on-year increase of 701134%; The non net profit deducted was 741 million yuan, a year-on-year increase of 440281%.
Guangdong Tonze Electric Co.Ltd(002759) can achieve the above-mentioned achievements by relying on the lithium industry.
The company’s annual report shows that lithium hexafluorophosphate is an important raw material for lithium batteries, which is mainly used in energy storage batteries, power batteries, digital and lighting series lithium batteries and other products. At present, among the two main businesses of lithium hexafluorophosphate and small household appliances, lithium hexafluorophosphate accounts for more than 80% of the sales revenue, and the sales revenue of small household appliances accounts for less than 20%. The profit mainly comes from lithium hexafluorophosphate business.
On the one hand, the company completed the actual output of 9364 tons with the design capacity of 8160 tons of lithium hexafluorophosphate, double the actual output of 4602 tons last year, and the net profit was the best performance of the company since it was listed. On the other hand, the company’s small household appliance business is still difficult to operate and in a state of loss.
The second “little money maker” is Chengxin Lithium Group Co.Ltd(002240) . The annual performance report released on March 29 shows that the operating revenue in 2021 is about 2.934 billion yuan, a year-on-year increase of 63.88%; The net profit attributable to the parent company was about 851 million yuan, a year-on-year increase of 303029%.
In addition, Hunan Changyuan Lico Co.Ltd(688779) net profit increased by 538.17% year-on-year, ranking sixth; The net profit of Zangger mining increased by 523.60% year-on-year, ranking seventh Hainan Mining Co.Ltd(601969) net profit increased by 513.55%, ranking eighth.
Although it is not close to the top ten, many listed companies still have good performance: Guangzhou Tinci Materials Technology Co.Ltd(002709) net profit increased by 314.42% year-on-year, ranking 13th Jiangsu Azure Corporation(002245) net profit increased by 141.09%, ranking 26th.
Although many lithium battery concept stocks have not released annual reports, according to the performance forecast, they also have the potential to hit the top of the “money making list” of the lithium battery industry.
Tianqi Lithium Corporation(002466) it is estimated that the net profit attributable to the parent company will reach 1.8 billion yuan to 2.4 billion yuan in 2021, while the company lost 1.833 billion yuan in the same period of last year. According to the preliminary calculation of the reporter, Tianqi Lithium Corporation(002466) net profit attributable to the parent may increase by up to about 230%, so as to turn losses into profits.
Tianqi Lithium Corporation(002466) said that the main reason for the company’s profit was that the sales volume and average sales price of the company’s main lithium products in 2021 were significantly higher than those in 2020 due to the improvement of the global new energy vehicle boom, the accelerated capacity expansion of lithium-ion battery manufacturers and the pick-up of downstream cathode material orders.
Zhejiang Huayou Cobalt Co.Ltd(603799) it is estimated that the net profit attributable to the parent company in 2021 will be between 3.7 billion and 4.2 billion yuan, with a year-on-year increase of 217.64% – 260.56%. The company said that in 2021, the demand for new energy lithium battery materials continued to grow rapidly, the production and sales volume of the company’s main products increased, the product sales price also continued to rise, and the profitability increased significantly.
Eve Energy Co.Ltd(300014) it is estimated that the net profit attributable to the parent company will be between 2.7 billion yuan and 3 billion yuan in 2021, with a year-on-year increase of 65% – 85%. The company said that its sales expanded and its operating revenue increased by more than 100% in the year. Among them, the business of consumer battery and power energy storage battery increased significantly, and the profit increased.
expensive raw materials lead to more expensive products Ganfeng Lithium Co.Ltd(002460) lithium series products average price rise 49%
Lithium prices have soared since last year.
The reporter learned that the global distribution of lithium resources is extremely uneven, and most of the supply comes from salt lakes and hard rock lithium mines.
Among the main types of lithium deposits currently developed in the world, salt lake brine lithium deposit is the most important deposit type, accounting for 75% of the global lithium resource reserves, and it is also the leading direction of lithium industrial mining. The mature salt lakes are mainly distributed in the lithium triangle of South America and China. On the other hand, Australia is the world’s largest producer of lithium ore. most lithium mines are still concentrated in Western Australia, accounting for about 90% of the world’s lithium ore supply.
In recent years, lithium is in short supply. According to the Research Report of Minmetals securities, from 2016 to 2021, the global output of lithium ore (concentrate form) increased significantly from 88000 tons of LCE to 319000 tons of LCE, while the global output of lithium salt lake increased from 126000 tons of LCE to 256000 tons of LCE However, the global LCE demand in 2021 is 606200 tons.
However, affected by the spread of the epidemic and the downturn of lithium price in 2020, lithium resource enterprises have reduced capital expenditure and slowed down the progress of project expansion in 2020. Therefore, the new supply of lithium resources is limited in 2021, and the market is still in a tight balance between supply and demand.
The price of lithium is rising because of the imbalance between supply and demand. According to the data of Shanghai Nonferrous Metals network, as of February 2022, the CIF price of 5% – 6% spodumene concentrate in China was about US $26102660 / ton, an increase of 502% – 565% compared with the price of US $400435 / ton at the beginning of 2021.
Moreover, under the background of carbon emission reduction and the development of new energy, the electric vehicle industry has opened a golden period of development. According to the data released by the Ministry of industry and information technology, in 2021, the production and sales of new energy vehicles in the Chinese market were 3.545 million and 3.521 million respectively, an increase of 1.6 times year-on-year, ranking first in the world for seven consecutive years.
According to the annual report of Ganfeng lithium battery, in recent years, due to the rapid development of new energy vehicles and energy storage system industries and the rising demand for power batteries, the demand for lithium iron phosphate materials and ternary materials has expanded rapidly, and the demand for electric vehicles and power batteries will be released and converted into actual output, further stimulating the demand for lithium. The industry has gradually changed from the balance of supply and demand to the state of tight supply. Stimulated by the relatively tight supply of lithium compounds and the rising industrial demand, the price of lithium compounds has continued to rise since 2021.
This is also reflected in the financial reports of many listed companies.
Ganfeng Lithium Co.Ltd(002460) 2021: fuel and power costs increased by 106.73% year on year; The cost of raw materials consumed increased by 51.59% year-on-year.
Affected by this, Ganfeng Lithium Co.Ltd(002460) increased the selling price of the product.
According to the annual report, Ganfeng Lithium Co.Ltd(002460) the average selling price of lithium series products in the first half of the year was 72200 yuan, and the average selling price in the second half of the year was 107700 yuan, an increase of 49.12% year-on-year; The selling price of lithium battery series products was 151800 yuan in the first half of the year and 173200 yuan in the second half of the year, with an average year-on-year increase of 14.10%. These price increases have been affected by the upward market situation of lithium salt products.
Due to the tight purchase price of lithium phosphate industry in 2020, the company’s purchase price of six kinds of raw materials also increased significantly, which was mainly affected by the increase in the price of lithium phosphate industry in 2020.
According to the company’s annual report, the average price including tax of lithium fluoride per ton in 2020 was 101500 yuan. By 2021, the average price including tax per ton reached 185700 yuan, with a price increase of 83%, and the impact of the price increase reached 146 million yuan.
Chengxin Lithium Group Co.Ltd(002240) is the same. In the annual report, Chengxin Lithium Group Co.Ltd(002240) disclosed that the average price of the company’s products was 59900 yuan in the first half of the year and 116800 yuan in the second half of the year. The average selling price increased year-on-year. In the Chengxin Lithium Group Co.Ltd(002240) performance presentation, the company mentioned that the lithium salt industry has a strong demand due to the rapid development of new energy vehicles and other fields.
resources are king battery recovery and lithium extraction
Due to the tight demand for lithium batteries, recently, listed companies have snapped up lithium mines Huaan Securities Co.Ltd(600909) also put forward the saying that “resources are king and accelerate development”.
In 2021, Ganfeng Lithium Co.Ltd(002460) successively acquired bacanora by tender offer and obtained its control, acquired 100% of the property share of Yili Hongda, indirectly held 49% equity of Qinghai Yiliping Salt Lake project, and acquired 50% equity of goulamina spodumene mine project in Mali.
In September 2021, Chengxin Lithium Group Co.Ltd(002240) wholly-owned Sunnyside Shengxin international signed an agreement with stellar investment PTE. Ltd. (a limited liability company established and existing under the laws of Singapore) to invest and establish a joint venture in Indonesia to invest in the construction of a 60000 ton lithium salt project in morowali Industrial Park (IMIP) in morowali County, central Sulawesi province, with a total investment of about US $350 million; Shengxin international holds 65% equity of the joint venture.
Zhejiang Huayou Cobalt Co.Ltd(603799) also joined the lithium track in December 2021 Zhejiang Huayou Cobalt Co.Ltd(603799) at that time, it was announced that the company planned to acquire the prospective lithium mine in Zimbabwe for us $422 million through its subsidiary Huayou international mining.
Zhejiang Huayou Cobalt Co.Ltd(603799) said that the acquisition of Arcadia project will help the company strengthen the layout of upstream lithium resources, enhance the resource reserves required for lithium battery new energy materials, and form a strong resource guarantee for the company’s middle and downstream industrial chain.
As for enterprises’ overweight lithium battery track, Huaan Securities Co.Ltd(600909) then analyzed the situation of lithium mines in China, saying that China’s spodumene mines are mainly concentrated in Sichuan, with good resource endowment and low degree of development.
Methylka in Ganzi Prefecture and Kerin in Aba Prefecture are two main spodumene mining areas in Sichuan, which are relatively concentrated, including six mines with mining rights. The ore resource reserves of the six mines reach 160 million tons, equivalent to more than 2 million tons of lithium oxide reserves. At present, only methylka and yelonggou lithium mines are under mining, and the rest are in the early stage of the project. Sichuan is endowed with good lithium resources, with an average grade of 1.3% – 1.4%. Spodumene resources in Sichuan need to be developed urgently.
In addition to adding salt lakes and hard rock lithium mines, lithium battery companies are also interested in recycling and extracting lithium.
Ganfeng Lithium Co.Ltd(002460) said that with the increasing demand for the treatment of retired batteries due to the use of automobiles and consumer electronic products, the company has great growth potential in lithium battery recycling business and further enriched the source of lithium raw materials.
In the future plan, the company will establish a large-scale comprehensive facility that can recover 100000 tons of retired lithium batteries every year. The company continues to expand its business downstream by expanding the capacity of lithium battery recycling business and its expertise in recycling and reusing retired batteries.
Huaan Securities Co.Ltd(600909) believes that as the demand side is driven by the field of new energy, the demand for lithium will maintain rapid growth and is expected to continue to exceed market expectations. On the supply side, the production expansion of leading lithium resource suppliers such as overseas salt lakes and Australian lithium mines is slow, the release of production capacity needs time to be verified, and the supply increment in the next 2-3 years is limited.
Huaan Securities Co.Ltd(600909) it is estimated that from 2021 to 2023, the lithium supply shortage will be 10000, 14000 and 8000 tons of LCE “Lithium supply and demand is expected to be in a tight balance, the high outlook continues, and the lithium price center remains high supported by the relationship between supply and demand”.
