\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 549 Xiamen Tungsten Co.Ltd(600549) )
Event: the company released the annual report of 2021. In 2021, the company achieved a revenue of 31.85 billion yuan, a year-on-year increase of 68%; The net profit attributable to the parent company was 1.18 billion yuan, with a year-on-year increase of 92%, and the net profit attributable to the parent company after deducting non profits reached 1.03 billion yuan, with a year-on-year increase of 125%. In a single quarter, in 2021q4, the company achieved a revenue of 9.68 billion yuan, an increase of 57.56% year-on-year and 21.77% month on month; The net profit attributable to the parent company was 190 million yuan, a year-on-year decrease of 24% and a month on month decrease of 40%; Net profit deducted from non parent company was 160 million yuan, a year-on-year decrease of 1% and a month on month decrease of 43%.
Tungsten molybdenum sector: in 2021, the main revenue increased by 49.03% year-on-year to RMB 10.633 billion, and the gross profit margin was 26.76%, down 2.99pct year-on-year. In 2021, both the volume and price of products increased, driving the growth of revenue. At the same time, the company tilted towards high-end products and improved its profitability. Among them, the revenue of cemented carbide products was about 2.3 billion yuan, with a year-on-year increase of about 36% and a gross profit margin of about 28%, which remained basically unchanged year-on-year; The cutting tool was about 760 million yuan, with a year-on-year increase of about 13%, and the gross profit margin was about 45%, with a year-on-year increase of about 6pct; The fine tungsten wire is about 200 million yuan, with a year-on-year increase of about 33%, and the gross profit margin is about 39%, which is basically unchanged year-on-year. The downstream deep processing business of the company continues to make efforts. In the future, 10 million indexable tools, 2.36 million overall tools and 80 billion meters of photovoltaic tungsten wire will be added.
Battery materials: in 2021, the main revenue increased by 94.82% year-on-year to RMB 15.566 billion, and the gross profit margin decreased by 0.93 PCT to 9.55% year-on-year. Lithium cobaltate: the growth of revenue comes from the growth of downstream demand, and the market share increases to 42% (H1 in 2021); The gross profit margin was 8.20%, a year-on-year decrease of 0.93pct. The decrease in gross profit margin was caused by the rise in the price of raw materials, but the gross profit per ton increased by 1.42% year-on-year to 20900 yuan / ton. Ternary materials: revenue increased significantly year-on-year due to the increase of production capacity and downstream demand; The gross profit margin was 13.02%, with a year-on-year increase of 4.90pct, and the gross profit per ton was 19300 yuan / ton, with a year-on-year increase of 120.84%. The increase of the gross profit margin may be due to the adjustment of the company’s ternary products to products with high gross profit. The company will accelerate the layout of ternary and lithium iron phosphate material production capacity, and the cathode material production capacity may increase from 70000 tons / year to about 160000 tons / year from 2021 to 2023.
Rare earth sector: in 2021, the main revenue increased by 57.02% year-on-year to RMB 4.697 billion, and the gross profit margin increased by 1.27pct to 12.96%. In 2021, the company continued to optimize the product structure, and the sales volume of rare earth deep-processing products increased, driving the revenue and profit growth of rare earth business segment. In terms of magnetic material business, due to the optimization of product structure and the increase of customer development in the automotive field, the sales of automotive magnetic materials accounted for 30%, with a year-on-year increase of about 10PCT. The revenue of magnetic materials increased by about 71% year-on-year to about 2 billion yuan. However, affected by the rising price of raw materials, the gross profit margin of magnetic materials decreased 2pct to about 10%. In the future, the company will focus on the development of magnetic material business, and the magnetic material production capacity will be increased from 8000 tons in 2021 to 12000 tons in 2022.
Investment suggestion: we expect to realize the net profit attributable to the parent company of RMB 1.821/2.162/2.404 billion in 2022, 2023 and 2024, with a year-on-year increase of 54.22% / 18.77% / 11.17% and EPS of RMB 1.28/1.52/1.69/share respectively. Considering that the company’s businesses in the three sectors have expansion projects under construction, and the downstream demand is good, the company has a good growth momentum. Based on the closing price on April 1, 2022, Xiamen Tungsten Co.Ltd(600549) ‘s PE is 14 / 12 / 11, which is covered for the first time and given a “recommended” rating.
Risk tips: the risk of economic fluctuations affecting demand and price, the risk of raw materials, the risk of key industrial projects not meeting expectations, etc.
