\u3000\u3 Shengda Resources Co.Ltd(000603) 663 Sanxiang Advanced Materials Co.Ltd(603663) )
The net profit attributable to the parent company increased by 54.98%, creating the best performance in history. According to the company’s announcement, in 2021, the company achieved an operating revenue of 789 million yuan, a year-on-year increase of 7.65%, a net profit attributable to the parent company of 100 million yuan, a year-on-year increase of 54.98%, and a deduction of non attributable net profit of 99 million yuan, a year-on-year increase of 66.19%; In 2021, the company’s performance hit a record high, in line with market expectations.
The increase in volume and price of zirconium products boosted the company’s performance. Benefiting from the rising price of zircon sand and the strong demand in the downstream, the production and sales performance of the company’s zirconium products in 2021 was excellent, with an operating revenue of 590 million, a year-on-year increase of 4.68%, and the output and sales volume reached 19900 and 20500 tons respectively, a year-on-year increase of 9.40% and 11%. The company’s product structure continued to be optimized, and the gross profit margin increased by 3.78% to 32.43%. At present, the prices of the company’s main products fused zirconium and sponge zirconium are 46300 yuan / ton and 235000 yuan / ton respectively, up 98.92% and 60.96% compared with the beginning of the 21st century; Due to the strong demand in the downstream and the price of raw materials, the price of zirconium products in the industry increases frequently, and the price of zirconium products may remain high. With the superposition of the company’s technical advantages and the cost advantages of its own hydropower stations, the company’s performance is expected to reach a new level.
The zirconium industry chain will be fully laid out, and the new production capacity will be put into operation soon. At present, the company has a production capacity of 26000 tons of fused zirconium and 3000 tons of industrial sponge zirconium. It is an absolute leader in the fused zirconium and sponge zirconium industry, and distributes zirconium based amorphous alloy downstream of sponge zirconium. In addition, the company entered the chemical zirconium market through the investment and construction of 100000 tons of zirconium oxychloride project, and extended downstream to lay out nano zirconia and special ceramics. So far, the company has built two industrial chains of fused zirconium and chemical zirconium, which is expected to form a good synergy. The company’s capacity expansion is accelerating. The first phase of 1000 tons of nano zirconia is gradually reaching the production capacity. The first phase of 20000 tons of zirconium oxychloride has entered the trial production stage. It is expected to be put into operation in the first half of this year. The 1500 tons of special ceramics project is under active construction. In addition, there is the planned capacity of 2000 tons of sponge zirconium in the second phase. The release of new capacity will further consolidate the leading position of the company.
Work with Contemporary Amperex Technology Co.Limited(300750) magnesium aluminum new materials to open up room for performance growth. The company established Ningde Wenda magnesium aluminum Technology Co., Ltd. with Contemporary Amperex Technology Co.Limited(300750) , Jiangsu Wanshun electromechanical and other enterprises, with the company holding 35%. At present, the factory’s die-casting unit has been successfully commissioned, the battery end sector products have been confirmed, and Contemporary Amperex Technology Co.Limited(300750) multiple brands of products have been successfully imported; At the same time, it is planned to enter the field of magnesium alloy building formwork and lightweight electric ship, and the magnesium aluminum new material business is expected to open the company’s long-term growth space.
The implementation of stock options and restricted stock incentives demonstrates the company’s confidence in development. The company issued the 2022 stock option and restricted stock incentive plan (Draft), which plans to grant a total of 2520000 shares to middle-level managers, core backbone personnel and other incentive objects, including 1289000 shares of stock incentive and 1231000 shares of restricted stock incentive. The exercise price of stock option for the first time is 16.65 yuan and the grant price of restricted stock for the first time is 8.33 yuan; The performance evaluation standard is based on the arithmetic mean of net profit in 2019, 2020 and 2021. The growth rate of net profit from 2022 to 2024 shall not be less than 50%, 100% and 150%. Further incentive is conducive to mobilizing the enthusiasm of the company’s core team, establishing a long-term and effective reward mechanism, and highlighting the company’s confidence in long-term development.
Investment suggestion: with the expansion of the company’s production capacity of zirconium series products and the development of magnesium aluminum alloy business, the company’s performance is expected to be released gradually. The company’s operating revenue is expected to reach 1.620 billion yuan, 1.983 billion yuan and 2.243 billion yuan in 20222024, the net profit attributable to the parent company is 187 million yuan, 234 million yuan and 288 million yuan respectively, and the EPS is 87 million yuan, 1.09 million yuan and 1.34 million yuan respectively. Maintain the “buy” rating.
Risk tip: the epidemic situation is repeated, the price of raw materials rises, and the new production capacity is less than expected
