\u3000\u30 China Baoan Group Co.Ltd(000009) 6 Shenzhen Guangju Energy Co.Ltd(000096) 0)
The company announced the annual report of 2021 and the performance forecast of Q1 in 2022. In 2021, the company achieved a revenue of 53.844 billion yuan, a year-on-year increase of 20.2%, a net profit attributable to the parent company of 2.817 billion yuan, a year-on-year increase of 308.03%, deducting a net profit not attributable to the parent company of 2.874 billion yuan, a year-on-year increase of 372.26%, and the performance met our expectations. In 2022, Q1 company realized a net profit attributable to its parent company of 1.1 billion yuan to 1.3 billion yuan, a year-on-year increase of 234.40% to 295.20%, a month on month increase of 107.74% to 127.33%, deducting a net profit not attributable to its parent company of 1 billion yuan to 1.2 billion yuan, a year-on-year increase of 0% to 115.27%. The performance exceeded our expectations.
Comments: the volume and price of the company’s main products have risen simultaneously, driving substantial growth in performance:
1) volume: the company achieved 335100 tons of non-ferrous metal output in 2021, with a year-on-year increase of 5%. The sales volume of main tin products (tin ingots, tin materials and tin chemicals) was 98000 tons, with a year-on-year increase of 15%.
2) price: in 2021, the price of main metal varieties of the company increased year-on-year. The average price of tin ingot was 191600 yuan / ton, a year-on-year increase of 53%; The average price of tin materials was 182500 yuan / ton, a year-on-year increase of 49%; The average price of tin chemical industry was 91000 yuan / ton, a year-on-year increase of 51%.
3) gross profit per ton: in 2021, the company focused on strengthening fine management and lean production, achieved remarkable results in cost control, and the gross profit per ton of main products increased year-on-year. The gross profit per ton of tin ingot was 54700 yuan / ton, a year-on-year increase of 79%; Tin material was 37500 yuan / ton, with a year-on-year increase of 100%; Tin chemical industry was 25800 yuan / ton, with a year-on-year increase of 108%; The gross profit per ton of copper products was 2900 yuan / ton, a year-on-year increase of 24%; The gross profit per ton of zinc products was 7500 yuan, a year-on-year increase of 21%.
4) competitive advantage: under the coordinated linkage of the whole tin industry chain and supply chain, the company’s market share has further expanded. In 2021, the company’s tin market share in China was 49.31%, with a year-on-year increase of 1.61pct, and the global market share was 23.91%, with a year-on-year increase of 1.33pct. The tin production and sales volume has ranked first in the world for 16 years.
Core focus in the future: the company is a global leader in tin and indium industry, with excellent resource endowment. At the same time, it has the competitive advantage of the whole industrial chain of “mining, smelting and deep processing of new materials”. The company plans to produce 45000 tons of commercial tin ingots, 28800 tons of tin products, 21000 tons of tin chemical products, 125000 tons of copper products, 119500 tons of zinc ingots and 62.5 tons of indium ingots in 2022. At the same time, after the completion of the mining expansion project and its supporting projects in Tongjie and Manjiazhai mining areas, the mining capacity of the mining area will be increased from 2.1 million tons / year to 3.6 million tons / year. In addition, the company continues to extend the industrial chain and focus on tin and indium to the intensive processing business. In the future, with the consumption pull in the fields of photovoltaic, automotive electronics and chemical industry, the demand for the company’s products is expected to continue to grow and the company’s profit is expected to thicken.
Investment suggestion: the company has excellent resource endowment. With its continuous improvement of the competitive advantage of the whole industrial chain and further increase of market share, the company’s performance will be thickened under the expectation of high tin price. We expect to realize the net profit attributable to the parent company of RMB 4.020/4.364/4.783 billion in 2022, 2023 and 2024, with a year-on-year increase of 42.7% / 8.6% / 9.6% and EPS of RMB 2.41/2.62/2.87/share respectively. Based on the closing price on April 19, 2022, the PE of the company in 2022 / 2023 / 2024 is 9 / 8 / 7 times, maintaining the “recommended” rating.
Risk warning: the price of tin, zinc and copper fluctuates sharply; Safety and environmental protection risks; Downstream demand is lower than expected.
