\u3000\u3 China Vanke Co.Ltd(000002) 240 Chengxin Lithium Group Co.Ltd(002240) )
The company’s lithium industry has gradually improved. Since 2021, the layout of the company’s lithium industry has gradually become clear. As a rookie in the lithium industry, the company has a global vision and the penetration pattern of the whole industrial chain, and will quickly implement the cognition of the lithium industry through strong execution. At the end of lithium resources, the company actively distributes lithium resources in Sichuan, Africa, Argentina and other important places in China; In addition to Deyang and Shehong bases in Sichuan, the company plans to set up lithium hydroxide plants in Indonesia. Industry vertical: in addition to battery customers such as Ningde, Samsung and LG and customers of positive materials such as Xtc New Energy Materials(Xiamen) Co.Ltd(688778) , Shenzhen Dynanonic Co.Ltd(300769) and others, the company will introduce Byd Company Limited(002594) as war investment through fixed increase, which will directly penetrate into the industrial terminal vehicle plant; Horizontally, the company signed a strategic cooperation agreement with Guocheng group to carry out lithium resources cooperation at the level of malkang Jinxin mining industry.
Strengthen the layout of lithium resources and actively protect lithium resources. The company ensures the supply of lithium resources through multiple channels and reduces the impact of cyclical fluctuations in upstream resource prices: (1) the raw ore production scale of oyno mine is 405000 tons / year, equivalent to about 75000 tons of lithium concentrate, and the company actively promotes the increase of reserves; The planned and designed raw ore production scale of sabixing mine in Zimbabwe 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; (2) Signed long-term off purchase agreements with overseas lithium resource enterprises such as Galaxy lithium, avz mining and aby; (3) The company has participated in Huirong mining in Yajiang County, Sichuan Province, owns the operation right of sdla Salt Lake project in Argentina, and participated in several initial exploration projects of salt lakes in Argentina through equity participation. The company will actively promote the construction and production of the above projects.
Lithium salt production capacity expanded rapidly, based in Sichuan and going overseas. At present, the company has four lithium salt production bases worldwide: (1) Zhiyuan lithium industry is located in Deyang City, Sichuan Province, with an annual production capacity of 40000 tons of lithium salt (including 25000 tons of lithium carbonate and 15000 tons of lithium hydroxide); (2) Suining Shengxin is located in Sichuan Shehong economic development zone. The lithium salt project with an annual output of 30000 tons (all lithium hydroxide) has been completed and put into operation in January 2022; (3) Indonesia Shengtuo is located in morowali Industrial Park (IMIP), morowali County, central Sulawesi province, Indonesia. The design capacity is 50000 tons of lithium hydroxide and 10000 tons of lithium carbonate per year. It is currently under construction and is expected to be completed and put into operation in 2023; (4) Shengwei lithium industry is located in Sichuan Shehong Economic Development Zone, with an annual output of 1000 tons. The planned capacity of phase I of the metal lithium project is 600 tons. At present, it has built a capacity of 400 tons. Based in Sichuan and going overseas, the company is the second lithium salt enterprise in China to build lithium hydroxide plants overseas.
Lithium prices will remain high in the medium and long term. In 2020, Q3 lithium carbonate price hit the bottom and reversed. Driven by the peak consumption season of new energy vehicles, Q4 lithium price experienced the first wave of accelerated rise in this super cycle, and the price of electric carbon rose to 90000 yuan / ton, doubling the increase; In the first half of 2021, the price of lithium remained at about 90000 yuan / ton. With the new energy vehicles entering the peak consumption season, Q3 started the second wave of accelerated rise, doubled the increase again and reached a record high of more than 180000 yuan / ton; Since Q4, the price of lithium has been stable at 19 Shenzhen Zhongheng Huafa Co.Ltd(000020) 0000 yuan / ton. The third round of accelerated rise was started at the end of November. At present, the price of lithium carbonate is 517000 yuan / ton. From 2022 to 2025, we expect that the supply and demand of lithium will remain in a tight balance, the industrial chain will maintain a low inventory level for a long time, and the lithium price is expected to remain high.
Profit forecast and investment rating: combined with the rhythm of the company’s capacity release and the development of lithium battery industry, we expect the company’s EPS to be 4.80, 6.48 and 8.14 yuan / share from 2022 to 2024, and the PE corresponding to the current stock price to be 10x, 7x and 6x respectively. We believe that the lithium company will continue to consider the opportunity of “purchasing lithium resources” and maintain the high valuation of the lithium industry.
Risk factors: insufficient supply of lithium concentrate leads to failure to support the release of lithium salt production capacity; The demand growth of new energy vehicles was less than expected or the release of lithium market supply exceeded expectations, resulting in the decline of lithium price; The company’s own lithium ore or new lithium salt production capacity is expected to be put into operation at a low rate.
