\u3000\u3 China Vanke Co.Ltd(000002) 497 Sichuan Yahua Industrial Group Co.Ltd(002497) )
The company released the annual report of 2021: the revenue was 5.241 billion yuan, a year-on-year increase of + 61.26%; The net profit attributable to the parent company was 937 million yuan, a year-on-year increase of + 189.22%; The net profit deducted from non parent company was 919 million yuan, a year-on-year increase of + 207.10%; The net cash flow from operating activities was 631 million yuan, a year-on-year increase of + 19.20%. In 21q4, the company achieved a revenue of 1.795 billion yuan in a single quarter, a year-on-year increase of + 73.05% and a month on month increase of + 35.87%; The net profit attributable to the parent company was 304 million yuan, a year-on-year increase of + 134.22% and a month on month increase of + 0.67%; The net profit deducted from non parent company was 307 million yuan, with a year-on-year increase of + 154.66% and a month on month increase of + 3.92%. In 2021, the production of lithium products of the company was 27330 tons, with a year-on-year increase of + 149.69%, the sales volume was 29136 tons, with a year-on-year increase of + 66.82%, and the inventory was 5834 tons, with a year-on-year increase of + 106.29%.
The company also released the first quarterly report of 2022: the revenue was 2.66 billion yuan, a year-on-year increase of + 210.22%; The net profit attributable to the parent company was 1.022 billion yuan, a year-on-year increase of + 121002%; The net profit deducted from non parent company was 1.015 billion yuan, a year-on-year increase of + 130102%; The cash flow from operating activities was 194 million yuan, a year-on-year increase of + 470.41%.
The scale of lithium salt processing capacity continues to expand, and lithium resources are reserved through multiple channels
The company has three production bases: Guoli, Xingsheng and Ya’an, with a total lithium salt processing capacity of about 43000 tons. Among them, Ya’an lithium industry’s phase I production line with an annual output of 20000 tons of battery grade lithium hydroxide has been officially put into operation in 2020, and Ya’an phase II production line with an annual output of 30000 tons of battery grade lithium hydroxide has been started in 2021. It is expected to be completed and put into operation before the end of this year. In addition, Ya’an phase III project is under planning. The company’s goal is that the comprehensive capacity of lithium salt products will exceed 100000 tons in 2025.
The company reserves lithium resources through multiple channels to provide safe and sufficient resource guarantee for lithium salt capacity expansion. The lithium resources currently deployed by the company include: ① signing an underwriting agreement with Galaxy lithium to provide no less than 120000 tons of lithium concentrate every year; ② It has a 37.25% stake in Lijiagou spodumene mine and plans to produce 180000 tons of lithium concentrate per year. After the project is put into operation, it will give priority to meeting the production and supply of Guoli company; ③ Participate in core company and have signed an underwriting agreement to provide at least 75000 tons of spodumene concentrate every year; ④ Participate in 4.6% equity of EFE Australia and have signed a strategic cooperation agreement; ⑤ 9.5% equity of EVR company; ⑥ Share 3.4% equity of aby company. The lithium concentrate of the 200000 t / a production line of the first phase of kenticha lithium mine project, the core asset, will be delivered in the second quarter of 2023, providing the company with no less than 120000 tons of lithium concentrate every year; ⑦ 13.23% stake in Canadian super lithium company and 60% stake in its wholly-owned subsidiary in cash.
Risk warning: insufficient supply of raw materials; Falling product prices; Production and sales did not meet expectations.
Investment suggestion: for the first time, give a “buy” rating.
It is estimated that the company’s revenue from 2022 to 2024 will be 13.402/17.194/21.927 billion yuan, with a year-on-year growth rate of 155.7% / 28.3% / 27.5%; The net profit attributable to the parent company was 3.602/4.131/5.311 billion yuan, with a year-on-year growth rate of 284.6% / 14.7% / 28.6%; The current diluted share price is 61.3/8/13, corresponding to eps.58/6. Considering that the company, as a mainstream lithium salt enterprise in China, has rapidly expanded the production capacity at the processing end, and the multi-channel lithium resource end layout provides a safe and sufficient resource guarantee for the release of lithium salt production capacity, the market share of lithium salt products is expected to be further improved in the future. It will be covered for the first time and rated as “buy”.
