\u3000\u3 China Vanke Co.Ltd(000002) 756 Yongxing Special Materials Technology Co.Ltd(002756) )
Core view
The company’s performance has increased significantly quarter by quarter. In 2021, the special steel business of the company operated steadily, and the lithium battery business developed rapidly. The sales volume of lithium carbonate products was 11200 tons, with a year-on-year increase of 16.88%. With the advantage of resources, the performance increased significantly under the high boom of the industry. In 2021, the company achieved a total operating revenue of 7.199 billion yuan, a year-on-year increase of 44.76%; The net profit attributable to shareholders of listed companies was 887 million yuan, a year-on-year increase of 243.83%. In the first quarter, the company achieved 2720 tons of lithium carbonate sales and 2.631 billion yuan of operating revenue, an increase of 15.53% month on month; The net profit attributable to shareholders of listed companies was 811 million yuan, an increase of 140.91% month on month. In addition, the company plans to distribute a cash dividend of 5 yuan (including tax) for every 10 shares to all shareholders. Lithium battery business is developing rapidly, with sufficient growth momentum in the later stage. The company’s phase II project with an annual output of 20000 tons of battery grade lithium carbonate is progressing in an orderly manner as planned. The first production line has been tested, and the second production line is under equipment installation, striving to be put into use at the end of the second quarter. The 1.8 million T / a lithium ore high-efficiency beneficiation and comprehensive utilization project has entered the final stage of construction, and some equipment has been installed and is planned to be put into use in the third quarter; The preliminary preparations for the lithium ore technical transformation and expansion project with an annual output of 3 million tons have been completed and entered the construction stage. Join hands with Contemporary Amperex Technology Co.Limited(300750) , Jiangxi tungsten industry to open up growth space. In January, the company signed a joint venture agreement with Contemporary Amperex Technology Co.Limited(300750) and Yongxing Special Materials Technology Co.Ltd(002756) or its related parties held 30% of the shares. It plans to build 6 million tons of mining capacity, 6 million tons of beneficiation capacity and 50000 tons of lithium carbonate capacity projects. In February, the company signed the letter of intent for cooperation with Jiangxi tungsten industry, and proposed to establish a joint venture to build a 20000 ton lithium carbonate project, with Jiangxi Yongxing new energy holding 49%; Among them, Jiangxi tungsten industry is responsible for providing the supply guarantee of lithium mica raw materials, and the company is responsible for providing the technical guarantee for the preparation of battery grade lithium carbonate from lithium mica.
The resource advantage is prominent, and the production cost is leading in the industry. At the moment when the price of upstream lithium concentrate is accelerating, the resource advantages of the company are becoming more and more prominent. Relying on its own whole industrial chain from mining, beneficiation to lithium carbonate deep processing, the company’s operating cost per ton of lithium carbonate in 2021 is about 43000 yuan / ton (including purchased raw materials), with outstanding cost advantages.
The special steel business is steady and the efficiency is improved. In 2021, the company’s high-performance stainless steel continuous casting system upgrading project and 250000 tons of high-quality stainless steel and special alloy rod and wire project were brought into full play, and the production and sales volume increased significantly. In the whole year, the sales volume of special steel was 313600 tons, with a year-on-year increase of 7.71%. However, due to the adverse impact of the sharp fluctuation of raw material prices, the gross profit margin fell slightly to 10.23%.
Risk warning: the construction progress of the project is less than expected; Product price fluctuations exceeded expectations.
Investment suggestion: the company has prominent resource advantages and clear growth path. Benefiting from the high demand boom and the sharp rise in the price of lithium carbonate, we raised the original performance forecast. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 4.62/56.5/5.95 billion yuan, with a year-on-year growth rate of 421.2% / 22.3% / 5.2%; The diluted EPS is 11.39/13.93/14.65 yuan, and the corresponding PE of the current stock price is 7.6/6.2/5.9x, maintaining the “buy” rating..
