\u3000\u3 Shengda Resources Co.Ltd(000603) 799 Zhejiang Huayou Cobalt Co.Ltd(603799) )
Key investment points
In 2021, the company realized a net profit attributable to the parent company of 3.898 billion yuan, a year-on-year increase of 234.59%, in line with expectations. In 2021, the company’s revenue was 35.317 billion yuan, a year-on-year increase of 66.69%; The net profit attributable to the parent company was 3.898 billion yuan, a year-on-year increase of 234.59%; Deduct non net profit of RMB 3.853 billion, with a year-on-year increase of 242.84%; In 2021, the gross profit margin was 20.35%, with a year-on-year increase of 4.69pct; The net profit margin of sales was 11.39%, with a year-on-year increase of 6.08pct. Previously, the company predicted that the net profit attributable to the parent company was 3.7-4.2 billion yuan, and the performance was in line with expectations.
Ternary precursors are deeply bound to downstream major customers, and we expect to maintain high growth in 2022. In 2021, the company sold 59000 tons of precursors, with a year-on-year increase of 77.41%. The price per ton was 110000 yuan / ton (including tax), with a year-on-year increase of 28%. The gross profit per ton was 14800 yuan / ton, with a year-on-year increase of 12.67%. The company’s existing precursor capacity is planned to reach 325000 tons. With the release of new capacity, we expect that the company’s precursor shipment is expected to exceed 100000 tons in 2022, maintaining high growth. The company’s downstream customers lock in the capacity from 2022 to 2025, and we expect to contribute new increment in 2022.
The cathode business was consolidated, and the shipment increased year-on-year. At the same time, nickel cobalt lithium automatic control was completed, and the integrated competitiveness was further enhanced. The company acquired 38.6% of the equity of Tianjin BAMO and completed the consolidation by the end of July 2021. The positive material contributed 4.764 billion yuan in revenue and 11.56% in gross profit margin. BAMO technology sold 56700 tons of cathode materials in 2021, a year-on-year increase of 90% + high growth. The company’s capacity expansion has accelerated. With the release of new capacity, we expect that BAMO’s capacity is expected to exceed 100000 tons in 2022, supporting the high growth of shipments. In addition, the company acquired Zimbabwe prospect lithium mining company and signed a cooperation framework agreement with Hubei Xingfa Chemicals Group Co.Ltd(600141) to further improve the integrated layout.
The company’s nickel hydrometallurgy project is progressing smoothly, contributing new performance increment in 2022, and plans to jointly build a new smelting project with Volkswagen and Qingshan. The company expects that the 60000 ton nickel metal volume nickel cobalt hydroxide hydrometallurgy project in Huayue will reach production by the end of June 2022, and the whole process of Huake 45000 ton high nickel matte project will be completed in the second half of this year. The company has a capacity of 10000 tons of battery grade nickel sulfate, 30000 tons of capacity has entered the commissioning stage, and the construction of 50000 tons of nickel sulfate project has been rapidly promoted. The company expects to put into trial production in the first half of this year, and the increase of integration proportion is expected to improve the profitability of the company’s precursors.
Cobalt and copper prices continued to rise, becoming the main source of profit. 1) Cobalt products: the company produced 37000 tons of cobalt products in 2021, with a year-on-year increase of 9.44%, and sold 25000 tons of cobalt products, with a year-on-year increase of 11%. We expect that the rebound of cobalt price will lead to the rebound of profitability and great price elasticity. 2) Copper products: in 2021, the company produced 103000 tons of copper products, a year-on-year increase of + 4.3%, and sold 93000 tons of copper products, a year-on-year increase of + 19.3%. We expect the profitability to be further improved.
Profit forecast and investment rating: the prosperity of the industry continues. We maintain the company’s net profit attributable to the parent company of 5.705/74.25/9.620 billion yuan from 2022 to 2024, with a year-on-year increase of 46% / 30% / 30%, corresponding to 16x / 12x / 9x. We give 25xpe in 2022, corresponding to the target price of 117 yuan, and maintain the “buy” rating.
Risk tip: the layout of electric vehicle sales is expected, and the price of upstream raw materials fluctuates sharply.
