\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 18 Nanjing Hanrui Cobalt Co.Ltd(300618) )
Event: the company’s total revenue hit a record high in 2021. In 2021, the company achieved an operating revenue of 4.35 billion yuan, a year-on-year increase of 93%; The net profit attributable to the parent company was 663 million yuan, a year-on-year increase of 98.25%; The non net profit attributable to the parent company was 694 million yuan, a year-on-year increase of 268.94%. The basic earnings per share was 2.15 yuan, a year-on-year increase of 82.20%; Roe was 15.07%, an increase of 3.24 percentage points over the previous year. It is proposed to distribute a cash dividend of 4.30 yuan (including tax) for every 10 shares. In 2021q4, the operating revenue in a single quarter was 1.146 billion yuan, an increase of 90.57% year-on-year and 1.95% month on month; The net profit attributable to the parent company was 177 million yuan, with a year-on-year increase of 2.63% and a month on month increase of 35.56%; The non net profit attributable to the parent deduction was 151 million yuan, with a year-on-year increase of 256% and a slight decrease of 0.46% month on month.
The volume and price of copper and cobalt increased simultaneously, driving the growth of performance: 1) volume: in 2021, the production and sales of copper products were 39900 tons / 34600 tons, with a year-on-year increase of 46.09% and 26.64% respectively, benefiting from the gradual release of 20000 tons of electrolytic copper capacity of Hanrui metal, a subsidiary; The production and sales of cobalt products were 7900 tons / 8200 tons, with a year-on-year increase of 24.82% and 38.08% respectively, thanks to the increase in the output of cobalt hydroxide in Mette, Congo. In 2022, the company will comprehensively promote the project progress. The 5000 ton cobalt hydroxide production line of its subsidiary Hanrui metal is expected to be put into operation in the second quarter of 2022, which will further expand the company’s Cobalt product capacity and continue to increase its performance. 2) Price: copper and cobalt prices increased by more than 40% during the reporting period, with considerable performance flexibility. In 2021, the average price of LME copper was US $9294 / ton, with a year-on-year increase of 49.9%. The average price of MB cobalt was USD 23.98/lb, a year-on-year increase of 54%. Benefiting from price elasticity, the gross profit margin of the company’s cobalt products increased by 19 percentage points to 34.38%.
The three fee rates continued to improve, while increasing R & D investment and consolidating the leading position of cobalt powder: in 2021, the three fees of the company totaled RMB 229 million, accounting for 5.27% of revenue, a year-on-year decrease of 2.68 PCT. Among them, the sales expense was 12 million yuan, a year-on-year decrease of 22.52%, mainly due to the decrease of the company’s logistics sales expenditure; The management fee was 169 million yuan, with a year-on-year increase of 40.66%; The financial expenses were 48 million yuan, an increase of 10.43% year-on-year. In addition, the company’s R & D expenditure in 2021 was RMB 40 million, with a year-on-year increase of 6.7%. It mainly invested in the R & D of cobalt powder process. In 2020, the company ranked third in the global market share of cobalt powder, and its R & D investment increased or further consolidated its leading position in the industry.
Strengthen the layout of the new energy industrial chain, extend the industrial chain and expand the growth space: the company raised 1.868 billion yuan to build Ganzhou Hanrui 10000 t / a metal cobalt new material and 26000 T / a ternary precursor project. The design capacity of phase I is 10000 t / a (metal). At present, the infrastructure project has been basically completed and the equipment installation is in progress. It is expected that the trial production will be carried out at the end of June 2022 and the production capacity of Q3 will be reached in 2023, Crude cobalt hydroxide raw material produced by Congo Maite company, a Nanjing Hanrui Cobalt Co.Ltd(300618) subsidiary, is used. Phase II will adopt the hydrometallurgical production line of ternary battery waste to build a 26000 T / a ternary precursor project, which is expected to reach production in 2024. After the completion of the project, the company successfully entered the new energy smelting and processing track from the upstream copper and cobalt smelting manufacturers, adding new highlights of profit growth.
Investment suggestion: we raised the operating income of the company from 2022 to 2024 to 8.230, 11.176 and 12.851 billion yuan, and expected to realize a net profit of 1.579, 1.847 and 2.112 billion yuan, corresponding to EPS of 5.10, 5.97 and 6.82 yuan / share respectively. At present, the corresponding share price of PE is 11.4, 9.7 and 8.5 times. Give a “Buy-A” rating, with a 6-month target price of 80 yuan / share.
Risk tips: the progress of the project is not as expected, the price of major metals such as copper and cobalt fluctuates sharply, and the risk of overseas business policy and environment.
