\u3000\u30 Shenzhen Quanxinhao Co.Ltd(000007) 92 Qinghai Salt Lake Industry Co.Ltd(000792) )
Core view
The company released the annual report of 2021: the annual revenue was 14.778 billion yuan, a year-on-year increase of + 5.44%; The net profit attributable to the parent company was 4.478 billion yuan, a year-on-year increase of + 119.58%; The net profit deducted from non parent company was 4.482 billion yuan, a year-on-year increase of + 108.57%; The net cash flow from operating activities was about 4.769 billion yuan, a year-on-year increase of + 115419%. In 2021, the output of potassium chloride of the company was about 5029600 tons, the sales volume was about 4736900 tons, and the inventory was about 709100 tons; The output of lithium carbonate is about 22700 tons, the sales volume is about 19300 tons, and the inventory is about 3435 tons. The company released the first quarterly report of 2022: the revenue was 7.617 billion yuan, a year-on-year increase of + 152.50%; The net profit attributable to the parent company was 3.497 billion yuan, a year-on-year increase of + 340.91%; The net profit deducted from non parent company was 3.480 billion yuan, a year-on-year increase of + 343.33%; The net cash flow from operating activities was 4.501 billion yuan, a year-on-year increase of + 199.45%. Potassium chloride sector: the company’s 22q1 potassium chloride output is about 1.14 million tons, and the sales volume is about 1.45 million tons, which is 310000 tons more than the output, mainly because the company has more inventory in 2021. In terms of sales price, the company actively responded to the national policy of ensuring supply and stabilizing price. Although the sales price of potassium chloride increased steadily, it is still lower than the price of imported potassium fertilizer in China.
Lithium carbonate sector: the company’s 22q1 lithium carbonate output is about 7000 tons, and the sales volume is about 6700 tons. The company also kept some lithium carbonate inventory in 2021, and the inventory level did not decline in 22q1. In addition, the company’s lithium carbonate production line has a relatively low capacity utilization in winter and is expected to return to full capacity production in the second quarter. In terms of sales price, the company mainly adopts the market-based pricing method, so the price will be closer to the price in the spot market.
The two core business segments are in a high business cycle: relying on the unique strategic resource advantages of Qinghai Chaerhan Salt Lake, the company has a very important strategic position in the development of salt lake resources and has become a double leading enterprise of potash fertilizer and lithium extraction from Salt Lake in China. At present, the company has a potassium chloride production capacity of 5 million tons / year. It is the largest potassium chloride production enterprise in China, accounting for more than 60% of China’s total production capacity; At present, the frequent occurrence of force majeure in overseas potash supply has pushed up the global potash price. At present, the company has a lithium carbonate production capacity of 30000 tons / year. It is the largest salt lake lithium extraction production enterprise in China. It has a strong cost advantage and still has great potential to expand production; At present, there is a pattern of booming supply and demand in the lithium industry, and the price of lithium carbonate is at a record high level; China is rich in lithium resources and mainly salt lake resources. The company is expected to fully enjoy the strategic dividend of Qinghai Salt Lake development.
Risk tip: the price rise of potassium fertilizer and lithium salt did not meet expectations; The progress of lithium carbonate production expansion is lower than expected.
Investment suggestion: raise the profit forecast and maintain the “buy” rating.
The profit forecast is raised. It is estimated that the company’s revenue from 2022 to 2024 will be 32.864320.38/35.135 billion yuan, with a year-on-year growth rate of 122.4% / – 2.5% / 9.7%, and the net profit attributable to the parent company will be 15.237/15.574/16.842 billion yuan, with a year-on-year growth rate of 240.2% / 2.2% / 8.1%; Diluted EPS is 2.80/2.87/3.10 yuan, and the corresponding PE of the current stock price is 9.5/9.3/8.6x. Taking into account the unique resource advantages of the company’s itochalkhan Salt Lake, the company is in an absolute leading position in the fields of potash fertilizer and lithium extraction from salt lakes in China. In particular, the company’s capacity in the field of lithium extraction from salt lakes is expected to expand rapidly in the future, and is expected to fully enjoy the development dividends brought by the high business cycle of the lithium industry, raise the profit forecast for 2022 and maintain the “buy” rating.
