\u3000\u3 China Vanke Co.Ltd(000002) 240 Chengxin Lithium Group Co.Ltd(002240) )
Event: according to the announcement of the company, (1) Shengze international, a wholly-owned subsidiary of the company, obtained 29.38 million shares privately offered by Chilean lithium industry for C $0.95 per share, with a total consideration of C $27.91 million (about 142 million yuan). In January 2022, the company participated in the private placement of Chilean lithium industry, including 428.6 ordinary shares and 4.286 million warrants. Together with this private placement, the equity proportion of Chilean lithium industry reached 19.86%. The company will have the right to nominate two directors to join the board of directors of Chilean lithium industry and provide two technicians to Chilean lithium industry to assist the exploration and development of the company’s projects in Argentina. (2) Shengyi international, a wholly-owned subsidiary of the company, plans to subscribe for 3.7 million shares of Australian aby company at the price of a $0.75 per share, a total of a $2.775 million (about 13.36 million yuan), accounting for 3.4% of the total share capital of aby company before IPO. On April 6, 2022, both parties signed the investment and share subscription agreement and the off take and sale agreement. (3) The equity transfer and change registration procedures of Max mind have been completed, and the wholly-owned subsidiary Shengyi international holds 51% equity of Max mind.
Chilean lithium industry and aby company: (1) Chilean lithium industry has 18 mining projects in South America, including 12 salt lake brine projects in Chile, with a total area of 688 square kilometers; One salt lake brine project in Argentina, with a total area of 233 square kilometers; And five gold, silver and copper projects, with a total area of 204.29 square kilometers. (2) Aby has rich experience in mine development. Its main resource, kenticha lithium mine, has a history of tantalum production for 27 years. In 2017, it turned to lithium resource exploration and development. The total resources range from 80-11 million tons of ore resources, equivalent to more than 1 million tons of Li2O (about 2.473 million tons of LCE). The lithium concentrate of phase I 200000 tons / year (equivalent to 30000 tons of LCE / year) production line will be delivered in the second quarter of 2023, The life of the mine is expected to exceed 18 years.
At present, under the tight supply, aokuang continues to raise the ore price, and the resource premium is high. Under the background of high certainty of new energy demand, the company continues to make efforts on the resource side, which may be beneficial to the long-term development of the enterprise. The salt lake resources of Chilean lithium industry are mostly in the initial exploration stage, and the transaction consideration is more economical than mature salt lakes. With reference to similar salt lakes such as Atacama, the subject Salt Lake has good resource endowment or the possibility of large-scale development; According to the announcement, aby is expected to supply concentrate in 2023, which can provide another stable increment of lithium raw materials in the future.
Max mind and Murong lithium mine projects are advancing as planned, while continuing to explore overseas lithium resources.
The company’s equity resources continued to increase:
(1) the company holds 75% interest in yelonggou lithium mine. The Li2O grade of the mine is 1.3%, the resource is 275600 tons of LCE, the concentrate capacity is 75000 tons / year, or there is an expectation of increasing reserves.
(2) the company holds 25.2% interest in Murong lithium mine, with Li2O grade of 1.63% and resource volume of 1.5896 million tons of LCE.
(3) the company holds 51% equity of maxmindand its sabixing Lithium Tantalum mine has a Li2O grade of 1.98% and a resource of 218800 tons of LCE.
(4) the company holds 50% of the operation right of sdla project in Argentina, and the annual production capacity of the project is 25000 tons of lithium carbonate equivalent.
(5) it holds 19.86% interest in Chilean lithium industry, and its salt lake resources have a promising prospect.
According to the announcement of the company, the current sources of lithium concentrate of the company include:
(1) the annual production scale of its own longgou raw ore is 405000 tons, which is converted into about 75000 tons of lithium concentrate. The lithium concentrate can be used by Zhiyuan lithium industry for lithium salt production.
(2) 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.
(3) from 2021 to 2023, it will underwrite 60000 tons of lithium concentrate of Galaxy lithium industry every year.
(4) three years (extendable) since avz is put into operation, 160000 tons of lithium concentrate (+ / – 12.5%) will be underwritten every year.
(5) it is proposed to participate in aby and underwrite 60 Faw Jiefang Group Co.Ltd(000800) 00 tons / year of lithium concentrate.
Investment suggestion: we expect the company’s operating revenue to be RMB 8308 million, RMB 13161 million and RMB 18572 million respectively from 2022 to 2024, and its net profit to be RMB 3.089 billion, RMB 4.584 billion and RMB 5.927 billion respectively, corresponding to EPS of RMB 3.57, 5.3 and 6.85 yuan / share respectively. At present, the corresponding PE share price is 13.9, 9.4 and 7.2 times. Maintain the “overweight-a” rating, and the six-month target price is 61 yuan / share.
Risk tip: lithium price is lower than expected, demand is lower than expected, and project progress is lower than expected
