\u3000\u3 China Vanke Co.Ltd(000002) 738 Sinomine Resource Group Co.Ltd(002738) )
The company released the annual report of 2021: the revenue was 2.394 billion yuan, a year-on-year increase of + 87.67%; The net profit attributable to the parent company was 558 million yuan, a year-on-year increase of + 220.33%; The net profit deducted from non parent company was 540 million yuan, a year-on-year increase of + 255.05%; The net cash flow from operating activities was 654 million yuan, a year-on-year increase of + 181.64%. In addition, the company’s investment budget for overseas mineral resources exploration from 2022 to 2023: it plans to invest 723067 million yuan of its own funds in the exploration of lithium mine in bikita mining area in Zimbabwe, lithium cesium tantalum mine in Tanco mining area in Canada and kasenpa gold mine in Zambia.
The company released the first quarter report of 2022: the revenue was 1.848 billion yuan, a year-on-year increase of + 399.02%; The net profit attributable to the parent company was 775 million yuan, a year-on-year increase of + 848.73%; The net profit deducted from non parent company was 774 million yuan, a year-on-year increase of + 953.63%; The net cash flow from operating activities was 164 million yuan, a year-on-year increase of + 231.12%.
Lithium mine and lithium salt business is expected to make the company’s performance continue to achieve leapfrog growth this year
Lithium fluoride business: the company’s 6000 T / a battery grade lithium fluoride reconstruction and expansion project has been completed by the end of 2021. The price of lithium fluoride mainly rose with the rise of lithium carbonate price, so the profit of single ton product increased significantly. In 2021, the production capacity of 3000 t / a battery grade lithium fluoride will basically reach the state of full production and full sales. On this basis, it is expected to achieve high growth with the release of new production capacity this year.
Lithium hydroxide / lithium carbonate business: the company’s annual output of 25000 tons of battery grade lithium hydroxide / lithium carbonate production line has been completed in August 2021 and successfully ignited, put into trial production and operation, and reached production in November 2021. It is expected to release most of the production capacity this year. In addition, the company plans to invest in a high-purity lithium salt project with an annual output of 35000 tons, with a total investment of about 1 billion yuan.
In terms of lithium salt resource guarantee: the technological transformation and recovery project of spodumene mining and beneficiation system with an existing processing capacity of 120000 tons / year in Tanco mine in Canada has been officially put into operation on October 15, 2021. Part of the first batch of self-produced lithium concentrate has arrived in China, and the company is actively promoting the open-pit mining scheme in Tanco mine. In addition, the company plans to acquire bikita lithium mine project in Zimbabwe, which is a mine in production. The main products are technical lithium permeable feldspar concentrate and cesium garnet concentrate, and the beneficiation capacity is 700000 tons / year. According to the original feasibility study report, bikita lithium mine plans to build a mining and beneficiation project with an annual processing capacity of 1.05 million tons. The product is spodumene. The company plans to optimize the feasibility study after the completion of project delivery.
Risk warning: the market demand for cesium rubidium salt and lithium salt does not meet expectations; The company’s production expansion progress is lower than expected.
Investment advice: maintain the “buy” rating.
Basically maintain the profit forecast for 2022. It is estimated that the company’s revenue from 2022 to 2024 will be RMB 11.826132.62/17.75 billion, with a year-on-year growth rate of 394.0% / 12.1% / 33.8%, and the net profit attributable to the parent company will be RMB 28.48/45.82/77.18 billion, with a year-on-year growth rate of 41.2% / 60.9% / 68.4%; Diluted EPS is 8.75/14.07/23.70 yuan, and the current share price corresponds to PE is 8 / 5 / 3x. Considering that the company occupies an absolute position in the global cesium rubidium salt market and has a leading advantage in China’s battery grade lithium fluoride Market, it has made a breakthrough in the field of lithium battery new energy materials. After that, it is expected to continue to realize the rapid expansion of production capacity in the lithium ore and battery grade lithium hydroxide / lithium carbonate market, realize the value revaluation and maintain the “buy” rating.
