\u3000\u3 Shengda Resources Co.Ltd(000603) 505 China Kings Resources Group Co.Ltd(603505) )
Event: the company released its annual report for 2021. In the past 21 years, the company achieved an operating revenue of 1.043 billion yuan, a year-on-year increase of + 18.6%, and a net profit attributable to the parent company of 245 million yuan, a year-on-year increase of + 2.9%; Among them, Q4 achieved an operating revenue of 399 million yuan in a single quarter, a year-on-year increase of + 24.7%, a month on month increase of + 75.7%, and a net profit attributable to the parent company of 75 million yuan, a year-on-year increase of + 7.0%, a month on month increase of + 8.4%.
Comments:
The production and sales volume of the company increased in 21 years, and the performance growth was in line with expectations: in 2021, the production and sales volume of the company’s main products increased, among which the output of high-grade fluorite ore was + 31.1% and the sales volume was + 39.8% year-on-year; The output of acid grade fluorite powder was + 9.4% year-on-year, and the sales volume was + 13.0% year-on-year. The average sales price of the company’s main products fluctuated year-on-year, of which the average price of acid grade fluorite powder was 2336 yuan / ton, year-on-year + 1.7%; The average price of high-grade fluorite ore was 1797 yuan / ton, a year-on-year increase of – 9.0%. In the past 21 years, the company increased its efforts to expand customers, and the increase of output led to the increase of sales volume, so as to realize the increase of performance. From the long-term demand side, the development of new energy and new materials will strongly drive the demand for fluorite, and the prosperity of fluorite industry is expected to improve. In recent years, the company’s retained resource reserves of fluorite have been stable at 27 million tons, the corresponding mineral amount is about 13 million tons, and the mining scale can reach 1.17 million tons / year. In 2022, the company plans to achieve the output target of about 45 Tianma Microelectronics Co.Ltd(000050) 0000 tons of fluorite products from a single mine and 20 Fawer Automotive Parts Limited Company(000030) 0000 tons of Baotou Iron and steel Jinshi. Through the Baotou Iron and steel project and the mine acquisition plan, we will actively prepare for the construction of production capacity for the future demand growth, which will further consolidate the leading position of the company in the fluorite industry.
Relying on the “basic sector” of fluorite resources, expand two new business sectors: the company’s project layout is mainly carried out around three sectors of “resources – fluorochemicals – new energy”. In the resource sector, the construction progress of the “beneficiation and chemical integration” comprehensive utilization project of associated fluorite resources cooperated by the company and Baotou Steel is ahead of schedule. 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. In this comprehensive project, the grade of fluorite refined powder produced by Baotou Steel Jinshi beneficiation project can be stabilized at about 90% after a small amount of technical transformation. By the end of 2021, the sales revenue for the company will be 36.73 million yuan; In the fluorine chemical industry sector, the site selection of jinobo fluorine chemical project has been scheduled in Damao Banner, Baotou city. The relevant environmental assessment, safety assessment and energy assessment procedures are being submitted for approval. Some equipment has been ordered in advance. It is expected that the phase I 120000 ton hydrofluoric acid production line will be completed by the end of 2023; In the new energy sector, the 25000 T / a new energy lithium fluoride battery material and 80000 T / a supporting fluorite project located in Jiangshan, Zhejiang Province will be constructed in three phases. The first phase is the 6000 t lithium hexafluorophosphate and 80000 t fluorite concentrate product mining and processing project; The second phase is the 9000 ton lithium hexafluorophosphate project; The third phase is the R & D center project of 10000 tons of lithium hexafluorophosphate and lithium difluorosulfimide. At present, the first phase of 6000 tons of lithium hexafluorophosphate has been put into construction and is expected to be put into trial production by the end of 2022.
Profit forecast, valuation and rating: the progress of Baotou Steel’s comprehensive utilization project of gold and stone associated fluorite resources exceeded expectations, and the company’s production capacity is expected to expand; The key projects of fluorine chemical industry and new energy sector were promoted smoothly, and the profitability of the company was further improved. Therefore, we raised the company’s profit forecast for 20222023 and added the profit forecast for 2024. It is estimated that the net profit for 20222024 will be 4.28 (up 9%) / 5.62 (up 14%) / 731 million yuan, equivalent to EPS of 1.37 yuan / 1.80 yuan / 2.35 yuan respectively. Maintain the “buy” rating.
Risk tip: the progress of new production capacity is less than expected, and the product price is at risk of falling.
