\u3000\u3 China Vanke Co.Ltd(000002) 738 Sinomine Resource Group Co.Ltd(002738) )
Geological prospecting started and transformed lithium cesium. The company started from the geological exploration business, entered the high-quality track of rare light metal resource processing and lithium battery new materials through the acquisition of Dongpeng new materials and cabotcsf Business Department of the United States, gave full play to the professional advantages of the company’s solid mineral resource exploration, strengthened the global leading position of cesium and rubidium resources of the company through the acquisition of lithium cesium mines such as Tanco in Canada and bikita in Zimbabwe, and guaranteed the lithium resources required by the company in the process of transformation to lithium salt smelting, And build a lithium cesium rubidium industrial community. The company has successfully transformed from geological exploration to lithium cesium business, and its performance has entered a period of rapid growth. The company expects to realize a net profit attributable to the parent company of 760800 million yuan in Q1 in 2022, with a year-on-year increase of 8.3-8.8 times.
Make up for the shortage of resources and improve the layout of lithium industry. The company will expand the annual capacity of lithium fluoride from 3000 tons to 6000 tons. At the same time, the production line of Dongpeng new material with an annual output of 15000 tons of battery grade lithium hydroxide and 10000 tons of battery grade lithium carbonate has been put into operation in 2021. In addition, the company plans to re invest in the project of 35000 tons of high-purity lithium salt with an annual output of 35000 tons through its wholly-owned subsidiary Chunpeng lithium industry. It is expected to be completed and put into operation in 2023. At that time, the capacity of lithium carbonate and lithium hydroxide of the company will reach 60000 tons / year. The company plans to acquire bikita lithium mine. If the delivery is completed, the company will have two lithium mines in production, the Tanco spodumene project in Canada and bikita lithium mine in Zimbabwe. With the promotion of production expansion, the company will provide sufficient lithium resources for lithium salt production in the later stage. Tanco has put into operation 120000 T / a spodumene mining and beneficiation capacity, and bikita has 700000 T / a lithium permeable feldspar mining and beneficiation capacity. After the completion of delivery, the company will expand the spodumene mining and beneficiation capacity of 1.05 million T / A.
Lithium prices are expected to remain high. 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 running steadily at 19 Shenzhen Zhongheng Huafa Co.Ltd(000020) 0000 yuan / ton. The third round of accelerated rise was started at the end of November, and the price soared to more than 500000 yuan / ton. There has been a correction recently. At present, the price of lithium carbonate is 480000 yuan / ton. From 2022 to 2025, we expect that the supply and demand of lithium will maintain a tight balance, the industrial chain will maintain a low inventory level for a long time, the price of lithium is expected to remain high, and the performance of relevant companies will jump sharply.
Cesium and rubidium are firmly in the leading position in the world. The company is the world’s largest mining enterprise exploiting cesium garnet mines, the world’s largest producer and supplier of cesium rubidium products, and the only supplier of cesium formate used in high-temperature and high-pressure oil and gas wells. At present, it has a capacity of 1021 tons / year of cesium rubidium salt. The company cut into cesium rubidium salt processing through the acquisition of Dongpeng new materials and cesium garnet resources through the acquisition of cabotcsf business unit. If bikita acquisition is completed, the company will control two of the three major mining areas of cesium garnet resources in the world, enrich cesium rubidium resource reserves, complete the whole industrial chain layout of cesium salt “cesium resource development + cesium salt production and R & D + sales and service + cesium resource recovery”, and further consolidate the global leading position of the company’s cesium salt business, At the same time, it also has the global pricing power of the cesium salt industry chain.
Profit forecast and investment rating: the company actively expands the business layout of lithium salt and lithium resources. As bikita lithium mine has not yet completed the delivery, (1) considering the performance contribution of bikita lithium mine, we estimate that the net profit attributable to the parent company in 20212023 will be 558, 3.050 and 5.348 billion yuan respectively, and the EPS will be 172, 9.36 and 16.42 yuan / share respectively, and the PE corresponding to the current share price will be 48x, 9x and 5x respectively; (2) If we do not consider the performance contribution of bikita lithium mine, we expect that the net profit attributable to the parent company from 2021 to 2023 will be 560 million yuan, 2.28 billion yuan and 2.47 billion yuan respectively, and the EPS will be 172, 6.99 and 7.58 yuan / share respectively, and the PE corresponding to the current stock price will be 47x, 12x and 11x respectively. We believe that with the high price of lithium, companies in the lithium industry as a whole will usher in the opportunity of valuation repair. Considering that the company is the leader of cesium and rubidium in the world, we will actively layout upstream lithium resources and continuously expand lithium salt production capacity to maintain the “buy” rating of the company.
Risk factors: the expansion of the company’s own lithium mine and the release of lithium salt production capacity are not as expected; The price of lithium salt and cesium salt fluctuated sharply; The restriction of repeated epidemic or global political turmoil on the terminal demand of the company’s products.
