\u3000\u30 Shenzhen Quanxinhao Co.Ltd(000007) 92 Qinghai Salt Lake Industry Co.Ltd(000792) )
Event overview: on April 11, the company released the performance forecast of 2022q1. The company expects the net profit attributable to the parent company in 2022q1 to be 3.45 ~ 3.55 billion yuan, with a significant increase of 335.1% ~ 347.7% year-on-year and 523.7% ~ 541.8% month on month; The net profit deducted from non parent company was RMB 3.43 ~ 3.53 billion, with a significant year-on-year increase of 337.3% ~ 350.0%. The basic earnings per share is 0.6350 yuan / share ~ 0.6534 yuan / share.
Analysis and judgment:
The volume and price of 22q1 potash fertilizer and lithium salt rose simultaneously, creating the best single quarter performance in the company’s history. In a single quarter, the net profit attributable to the parent company in Q1 was 3.45 ~ 3.55 billion yuan, deducting the net profit not attributable to the parent company of 3.43 ~ 3.53 billion yuan, which increased significantly year-on-year and month on month, creating the best single quarter performance since the company was listed. We believe that the reasons for the company’s performance changes are as follows: 1) the sales volume of main product Q1 increased: the output of potassium chloride of 22q1 company is about 1.14 million tons, and the sales volume is about 1.45 million tons, which is 370000 tons of potassium fertilizer accumulated in 21q4; The output of lithium carbonate of 22q1 company is about 7000 tons, and the sales volume is about 6700 tons (the output of 21q4 lithium carbonate is 6400 tons, and the sales volume is 4200 tons). The output increases by 144.9% year-on-year, 9.4% month on month, 170.2% year-on-year, and 59.5% month on month. We expect the company’s lithium carbonate inventory to be about 3800 tons, which is optimistic about the release of high lithium price performance. 2) High price of potassium fertilizer and lithium salt: the average ex factory prices of 60% and 57% potassium chloride powder of 22q1 company were 3688 yuan / ton and 3548 yuan / ton respectively, up 77% and 85% year-on-year and 16% and 16% month on month respectively; According to Asia metal network, the average price of 22q1 industrial grade lithium carbonate was 403000 yuan / ton, up 469.7% year-on-year and 109.1% month on month.
Attach importance to the strategic position of Qinghai Salt Lake Industry Co.Ltd(000792) as the “ballast stone” to ensure the supply of potash fertilizer and lithium salt in China. (1) The company has an annual production capacity of 5 million tons of potash fertilizer, ranking first in China and fourth in the world. China is one of the world’s largest potash fertilizer demanders, but its external dependence is about 50%. The company has improved the self-sufficiency rate of potash fertilizer in China and played the role of “ballast” of potash fertilizer supply to a large extent; (2) The company has formed a “1 + 2 + 3” salt lake lithium extraction project, in which Lanke lithium industry has reached the production capacity in phase I and is climbing the production capacity in phase II. The 30000 ton production line jointly invested by the company and Byd Company Limited(002594) is under pilot test, and the new capacity in the future is under planning. The company discharges 20 Fawer Automotive Parts Limited Company(000030) 0000 tons of LiCl of old brine every year, which may support the large-scale expansion of lithium production capacity in the future. The company will undertake the important task of ensuring China’s lithium resources.
It is difficult to slow down the contradiction between supply and demand of lithium resources. Accelerating China’s resource development is the best policy, Qinghai Salt Lake Industry Co.Ltd(000792) is the guarantee for China’s lithium resources to be independent and controllable. According to the data of the lithium industry branch, more than 70% of China’s lithium salt production in 2020 came from overseas lithium resource supply, and the high external dependence of lithium resources is also one of the reasons for the sharp rise in prices. With the rapid growth of demand for downstream electric vehicles and energy storage, only increasing supply is the final solution to alleviate the contradiction between lithium supply and demand. Qinghai, Tibet, Sichuan, Jiangxi and other places in China are rich in lithium resources. Only by accelerating the development of China’s lithium resources and ensuring China’s own lithium resource supply can we ensure the safe development of China’s Shanxi Guoxin Energy Corporation Limited(600617) industrial chain. Otherwise, the profits of the industrial chain will be quickly transferred to the upstream and abroad, highlighting the strategic importance of China’s local lithium resources.
Investment suggestion: under the high price of potassium and lithium, the elasticity of the company’s performance is prominent. We raised the forecast of the company’s net profit attributable to the parent company from 2021 to 2023 to 4.268 billion yuan, 12.261 billion yuan and 13.139 billion yuan. Based on the closing price on April 11, 2022, the corresponding PE is 39x, 14x and 13X respectively, maintaining the “recommended” rating of the company.
Risk tip: the prices of potassium fertilizer and lithium salt fell sharply; The production progress of Lanke lithium is lower than expected.
