\u3000\u3 China Vanke Co.Ltd(000002) 709 Guangzhou Tinci Materials Technology Co.Ltd(002709) )
Performance review
On April 14, 2022, the company announced that the revenue of 2022q1 was RMB 5.15 billion, a month on month increase of + 15%, and the net profit attributable to the parent company was RMB 1.5 billion, a month on month increase of + 129%. Deducting the net profit not attributable to the parent company was RMB 1.5 billion, a month on month increase of + 127%, the gross profit margin was 44%, a month on month increase of + 15%, and the net profit attributable to the parent company was 29%, a month on month increase of + 9%.
Business analysis
The performance exceeded expectations and benefited from the improvement of 6F self supply & electrolyte price. We expect the company to ship about 60000 tons of 22q1 electrolyte, a month on month increase of about + 13%. The net profit per ton was about 20000 yuan, with a month on month ratio of + 6000 yuan / ton, mainly due to the average price of electrolyte with a month on month ratio of about + 10%, the increase of 20000 tons of 6F to complete the climbing production, and the self supply rate of 6F increased from 70% of 21q4 to more than 90%. The daily chemical business is expected to contribute about 50 million yuan. Iron phosphate is expected to ship 9000 tons, the net profit per ton is about 9000 / ton, and the profit contribution is about 80 million yuan. In addition, we expect the company’s Beneficiation of lithium carbonate 22q1 to contribute about 190 million yuan of profit.
Lifsi & a new additive continues to contribute growth momentum. The electrolyte material system is upgraded, and lifsi & a new additive accelerates the penetration. It is predicted that the demand for lifsi is expected to exceed 60000 tons in 2025. At present, the company has a production capacity of about 6300 tons of lifsi and a shipment capacity of about 900 tons of 22q1. It is expected to form a production capacity of 10000 tons in the middle of the year and 60000 tons in the next 24 years. It also arranges new additives such as DTD and lithium difluorophosphate. Its electrolyte products have a higher comprehensive profit level and are expected to continue to contribute excess profits.
The integration of raw materials and technology is leading, and the cost side is further explored. The company’s single ton investment in liquid 6F process is low, the cost of continuous production process is low, and the yield & scale of liquid bifluoride is leading the industry. At the same time, the company continues to layout the upstream phosphorus, fluorine and lithium industrial chain, highlighting the cost side competitive advantage of the company.
Raising and investment help accelerate the release of integrated production capacity. On April 14, 2022, the company issued the plan for convertible bonds. It is proposed to raise and invest 3.466 billion yuan to build 150000 tons of liquid hexafluoride, 2000 tons of difluoride, 20000 tons of difluoride, 62000 tons of corresponding raw materials (hfsi), 20000 tons of VC and 60000 tons of daily chemical projects, and the integrated layout is accelerated. In addition, the company announced the construction of iron phosphate phase II (200000 tons), which is expected to reach production in 23q1.
Profit forecast and investment suggestions
The company takes the lead in Integration & new lithium salts, additives and iron phosphate contribute to the profit increment in large quantities. From 2022 to 2024, we maintained the company’s net profit attributable to the parent company of RMB 5.2 billion, 6.0 billion and 6.7 billion respectively, corresponding to EPS of RMB 5.4, 6.24 and 6.97, corresponding to PE of 17.8, 15.4 and 13.8 times, and maintained the rating of “overweight”.
Risk tips
Lower than expected risks in downstream demand, deterioration of industrial competition pattern, lower than expected risks in company capacity construction, lower than expected risks in new customer expansion, lifting of restricted shares and exchange risks.
