\u3000\u3 China Vanke Co.Ltd(000002) 460 Ganfeng Lithium Co.Ltd(002460) )
Event: Ganfeng Lithium Co.Ltd(002460) released the first quarterly report of 2022, and the company’s operating revenue was 5.365 billion yuan, an increase of 233.91% year-on-year; The net profit attributable to the parent company was 3.525 billion yuan, a year-on-year increase of 640.41%. Net profit deducted from non parent company was RMB 3.103 billion, with a year-on-year increase of 956.4%.
Comments: the performance of the first quarter hit another record high. In March, the company realized a net profit attributable to the parent company of about 2.125 billion yuan, more than the sum of January and February. The company’s excellent performance in the first quarter was mainly due to the sharp increase in the price of lithium salt products compared with the previous year: the average price of battery grade lithium carbonate and lithium hydroxide in the first quarter of 2022 was 400000 yuan / ton and 348000 yuan / ton respectively, with a year-on-year increase of 467% and 492%.
Lithium salt production capacity continues to expand, and the production capacity guideline will be increased to 300000 t / a LCE in 2025. As of December 2021, the company’s capacity of battery grade lithium carbonate is 43000 T / A and that of battery grade lithium hydroxide is 81000 T / A. The future capacity planning includes: 1) the new energy material project of lithium battery with an annual output of 50000 tons in Fengcheng City, Jiangxi Province. The project is constructed in two phases, and the first phase is the lithium hydroxide project with an annual output of 25000 tons; 2) Cauchari olaroz lithium salt lake project is constructed in two phases. The capacity of phase I is 40000 tons of lithium carbonate, and the capacity of phase II expansion is not less than 20000 tons of lithium carbonate equivalent; 3) Mariana lithium salt lake project, with a phase I capacity of 20000 tons of lithium chloride; 4) Sonora lithium clay project has a phase I capacity of 50000 tons of lithium hydroxide.
The downstream actively laid out the battery field, and the battery recycling and solid-state battery business were promoted in an orderly manner: according to the company’s announcement, Ganfeng Lithium Co.Ltd(002460) will form a recycling scale of 10000 tons of lithium carbonate equivalent in 2022, and is expected to form a recycling scale of 25000 tons of lithium carbonate equivalent in 2023. At present, the company’s solid-state battery has been installed on Dongfeng E70. The company will actively expand the downstream and promote the research and development of semi-solid and solid-state batteries. It is expected that the company will form a 2gwh generation of semi-solid battery capacity in 2022.
In March, the penetration rate of China’s electric vehicles continued to rise, and the price of upstream lithium products remained at a high level: according to the data of China Automobile Association, in March 2022, the output of Shanxi Guoxin Energy Corporation Limited(600617) vehicles reached 465000, and the production penetration rate reached 20.7%, a record high. The price of lithium has been adjusted back recently. As of April 22, 2022, the price of lithium carbonate has been adjusted back to 482000 yuan / ton, and the price has decreased by 4.5% in recent 30 days, but it is still at a historically high position. According to academician Ouyang Minggao pointed out at the electric vehicle hundred people’s meeting forum, “it is expected that the balance between supply and demand of lithium resources may return to normal in 2-3 years”. We believe that the tension between supply and demand makes lithium prices still expected to remain high and volatile.
Profit forecast and rating: in view of the high price of lithium salt, we raised the profit forecast for 20222023. It is expected that the EPS in 20222023 will be 9.1 yuan and 12.39 yuan respectively, an increase of 8% / 0.2% respectively, maintaining the EPS of 15.93 yuan in 2024, and the PE will be 10 times, 7 times and 6 times in 20222024. In view of maintaining our position as a “global leader” in the industry.
Risk warning: downstream demand is less than expected; Industry supply is released too quickly; The price of lithium salt products fell; The project construction of the company is less than expected; Safety and environmental protection risks; Overseas operation risk; Technology path change risk, etc.
