\u3000\u3 China Vanke Co.Ltd(000002) 460 Ganfeng Lithium Co.Ltd(002460) )
Event: Ganfeng Lithium Co.Ltd(002460) released the 2021 annual report. The company’s operating revenue was 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%.
Comments: the significant year-on-year increase in performance in 2021 is mainly due to (1) the significant year-on-year increase in the volume and price of lithium salt products of the company: the average prices of battery grade lithium carbonate and lithium hydroxide in 2021 were 117000 yuan / ton and 110700 yuan / ton respectively, with a year-on-year increase of 163% and 113%; In 2021, the company’s lithium salt sales volume was 90700 tons, with a year-on-year increase of 44%. (2) The net income from changes in fair value of the company was 2.23 billion yuan, accounting for 38.6% of the total profit, mainly because the share price of Pilbara company held by the company increased from a $0.935/share at the beginning of the year to a $3.2/share at the end of the year.
In February, the penetration rate of China’s electric vehicles continued to rise, and the price of upstream lithium products remained at a high level: according to the data of China Automobile Association, the production of Shanxi Guoxin Energy Corporation Limited(600617) vehicles in February 2022 was 370000, and the production penetration rate reached 20.3%, a record high. As of March 30, 2022, the price of lithium hydroxide was 491500 yuan / ton, an increase of 127% over the beginning of the year; The price of battery grade lithium carbonate was 504000 yuan / ton, an increase of 87% over the beginning of the year. On March 26, academician Ouyang Minggao pointed out at the electric vehicle hundred people’s meeting forum that “it is expected that the supply and demand balance of lithium resources may return to normal in 2-3 years”.
Lithium salt production capacity continues to expand, and the production capacity guideline will be increased to 300000 t / a LCE in 2025. As of December 2021, the company’s capacity of battery grade lithium carbonate is 43000 T / A and that of battery grade lithium hydroxide is 81000 T / A. The future capacity planning includes: 1) the new energy material project of lithium battery with an annual output of 50000 tons in Fengcheng City, Jiangxi Province. The project is constructed in two phases, and the first phase is the lithium hydroxide project with an annual output of 25000 tons; 2) The capacity of lithium carbonate project in phase I is less than 20000 tons, and the capacity of lithium carbonate project in phase II is not less than 20000 tons; 3) Mariana lithium salt lake project, with a phase I capacity of 20000 tons of lithium chloride; 4) Sonora lithium clay project has a phase I capacity of 50000 tons of lithium hydroxide.
Downstream actively layout the battery field, highlighting the advantages of industrial chain integration: the company is one of the few enterprises in the industry that layout downstream batteries. Ganfeng lithium has invested in the construction of new lithium battery projects with an annual output of 15gwh in Xinyu, Jiangxi and Liangjiang New Area, Chongqing. Among them, the new lithium battery project in Xinyu, Jiangxi has been put into operation in January 2022. In 2021, the subsidiary’s recycling technology will form a recycling capacity of 34000 T / A for decommissioning lithium batteries and comprehensive metal recovery. On March 30, 2022, the company announced that it would use its own funds of no more than 3 billion yuan to invest in industries related to the upstream and downstream of new energy.
Profit forecast and rating: in view of the high price of lithium salt, we maintain the profit forecast. It is estimated that the EPS in 20222023 will be 8.42 yuan and 12.37 yuan respectively. The new profit forecast for 2024 is estimated that the EPS in 2024 will be 15.93 yuan, corresponding to 15 times, 10 times and 8 times of 20222024pe. In view of the company’s leading position in the global industry, we maintain the “overweight” rating.
Risk warning: downstream demand is less than expected; Industry supply is released too quickly; The price of lithium salt products fell; The project construction of the company is less than expected; Safety and environmental protection risks; Overseas operation risk; Technology path change risk, etc.
