\u3000\u30 Shenzhen Quanxinhao Co.Ltd(000007) 92 Qinghai Salt Lake Industry Co.Ltd(000792) )
The company released the performance forecast for the first quarter of 2022: it is expected that the net profit attributable to the parent company in 22q1 will reach 3.45-3.55 billion yuan, with a year-on-year increase of about 3.3-3.5 times; It is expected to realize the deduction of non net profit of RMB 3.43-3.53 billion, with a year-on-year increase of about 3.4-3.5 times. The company’s outstanding performance has basically realized the thickening of performance brought by the simultaneous rise in the volume and price of potassium chloride and lithium carbonate.
Potassium chloride sector: the company’s 22q1 potassium chloride output is about 1.14 million tons, and the sales volume is about 1.45 million tons, which is 310000 tons more than the output, mainly because the company has more inventory in 2021. In terms of sales price, the company actively responded to the national policy of ensuring supply and stabilizing price. Although the sales price of potassium chloride increased steadily, it is still lower than the price of imported potassium fertilizer in China.
Lithium carbonate sector: the company’s 22q1 lithium carbonate output is about 7000 tons, and the sales volume is about 6700 tons. The company also kept some lithium carbonate inventory in 2021, and the inventory level did not decline in 22q1. In addition, the company’s lithium carbonate production line has a relatively low capacity utilization in winter and is expected to return to full capacity production in the second quarter. In terms of sales price, the company mainly adopts the market-based pricing method, so the price will be closer to the price in the spot market.
The two core business segments are in a high business cycle: relying on the unique strategic resource advantages of Qinghai Chaerhan Salt Lake, the company has a very important strategic position in the development of salt lake resources and has become a double leading enterprise of potash fertilizer and lithium extraction from Salt Lake in China. At present, potassium chloride and lithium carbonate belong to the sectors with very high prosperity in the industry, and the company’s annual operating performance is expected to achieve leapfrog growth. At present, the company has a potassium chloride production capacity of 5.5 million tons / year. It is the largest potassium chloride production enterprise in China, accounting for more than 60% of China’s total production capacity; At present, the frequent occurrence of force majeure in overseas potash supply has pushed up the global potash price. At present, the company has a lithium carbonate production capacity of 30000 tons / year. It is the largest salt lake lithium extraction production enterprise in China. It has a strong cost advantage and still has great potential to expand production; At present, there is a pattern of booming supply and demand in the lithium industry. The price of lithium carbonate is at an all-time high. It is expected that the contradiction between supply and demand will be difficult to ease in the short term; China is rich in lithium resources and mainly salt lake resources. The company is expected to fully enjoy the strategic dividend of Qinghai Salt Lake development.
Risk tip: the price rise of potassium fertilizer and lithium salt did not meet expectations; The progress of lithium carbonate production expansion is lower than expected.
Investment suggestion: raise the profit forecast and maintain the “buy” rating.
Raise the profit forecast. It is estimated that the company’s revenue from 2021 to 2023 will be 14.216313.1530871 billion yuan, with a year-on-year growth rate of 1.4% / 120.3% / – 1.4%, and the net profit attributable to the parent company will be 4.261144.96/14.563 billion yuan, with a year-on-year growth rate of 108.9% / 240.2% / 0.5%; Diluted EPS is 0.78/2.67/2.68 yuan, and the current share price corresponds to PE is 39 / 11 / 11x. Taking into account the company’s unique resource advantages of itochalkhan Salt Lake, it is in an absolute leading position in the field of potash fertilizer and lithium extraction from Salt Lake in China. In particular, the company’s capacity in the field of lithium extraction from Salt Lake is expected to expand rapidly in the future, and is expected to fully enjoy the development dividends brought by the high business cycle of lithium industry and maintain the “buy” rating.
