\u3000\u3 Shengda Resources Co.Ltd(000603) 505 China Kings Resources Group Co.Ltd(603505) )
Core view
The performance increased steadily in 2021, in line with expectations. The company issued the annual report of 2021: in 2021, the company realized an operating revenue of 1.043 billion yuan (year-on-year + 18.64%); The net profit attributable to the parent company was 245 million yuan (year-on-year + 2.93%); The non net profit attributable to the parent company was 245 million yuan (year-on-year + 8.97%); The basic earnings per share is 0.79 yuan. That is, in the single quarter of 2021q4, the company achieved an operating revenue of 399 million yuan (year-on-year + 24.67%) and a net profit attributable to the parent company of 75 million yuan (year-on-year + 6.98%), and the performance met our expectations. The unit cost of the company's main products increased in 2021 due to the impact that the new project has not yet produced benefits, the related period cost investment is large, the filling investment is increased, and the price rise of raw materials also leads to the rise of production costs. However, on the whole, the company still achieved a steady increase in operating performance, the smooth progress of key projects, the further strengthening of innovation ability, and the continuous optimization of governance and internal control.
The associated ore fluorite utilization project and lithium hexafluorophosphate project have made phased progress, and the key projects have been smoothly promoted. In terms of associated ore fluorite utilization project, two pilot production lines of Baotou Iron and steel Jinshi beneficiation project have been tested successfully, and Inner Mongolia Baotou Steel Union Co.Ltd(600010) original production line with an annual output of 100000 tons of fluorite concentrate has been successfully accepted. The original schedule will be greatly advanced, and it is expected to build a production capacity of 6 China High-Speed Railway Technology Co.Ltd(000008) 00000 tons / year by the end of 2022; Meanwhile, jinobo fluorochemical project has completed the preliminary site selection and reservation of some important equipment, and the phase I 120000 ton hydrofluoric acid production line is planned to be completed by the end of 2023. In terms of lithium hexafluorophosphate project, the company plans to build a "new energy lithium fluoride battery material with an annual output of 25000 tons and supporting 80000 tons / year fluorite project". At present, the order of most equipment in phase I project has been completed, and we expect it to be put into operation by the end of 2022 or the beginning of 2023. The company takes the layout of lithium hexafluorophosphate project as the entry point to enter the new energy business. In the future, lithium fluoride battery materials are expected to become the "second growth curve" of the company.
The development of new energy, semiconductor and new materials industries will support the long-term demand for fluorite. In addition to the steady growth of refrigerant demand in traditional downstream areas, according to our calculation (neutral), from 2022 to 2024, the global demand for fluorite refined powder of lithium hexafluorophosphate will reach 1661 / 20.31 / 295100 tons respectively, and the demand for fluorite refined powder of PVDF in China will reach 1598 / 19.18 / 207200 tons respectively. We are optimistic about the rapid development of new energy, semiconductor and new materials industries, which will support the demand for fluorite for a long time. With the continuous deepening of application fields such as high-performance and high value-added fluorine products in the next few years, the rapid development momentum of China's fluorine chemical industry is expected to continue, and the demand prospect of fluorite is still broad.
Risk warning: downstream demand is less than expected; The commissioning progress of new projects is lower than expected; Product price decline, etc.
Investment advice: maintain the "buy" rating. In the future, the company will continue to expand its reserves and production capacity through the acquisition of mines and the development of associated mines, and extend to the downstream high value-added field of fluorine chemical industry through its subsidiaries. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be RMB 380 million, RMB 504 million and RMB 620 million respectively, with a year-on-year growth rate of 55.3% / 32.4% / 23.2%; Diluted EPS = 1.22/1.62/1.99 yuan, corresponding to the current share price, corresponding to PE = 23.4/17.7/14.4x. Maintain the "buy" rating.
