Continuous growth cycle

\u3000\u3 Shengda Resources Co.Ltd(000603) 799 Zhejiang Huayou Cobalt Co.Ltd(603799) )

Performance Brief

On April 27, 22, the company released the quarterly report of the first quarter of the year 21. Q1 achieved a revenue of 13.212 billion yuan, a year-on-year increase of + 105.7%; The net profit attributable to the parent company was 1.206 billion yuan, a year-on-year increase of + 84.4%.

Business analysis

Nickel prices and profits are expected to continue to increase at a high level. Q1 profit increased year-on-year, mainly due to the high price of cobalt and copper. The average price of 22q1mb cobalt was $36 / lb, with a year-on-year increase of + 67% and a month on month increase of + 20%; The average price of LME copper was USD 10000 / ton, with a year-on-year increase of + 18% and a month on month increase of + 3%. In addition, Tianjin BAMO has also contributed to the year-on-year profit of Q1 since its consolidation in August 21. The price of copper and cobalt is expected to remain high in the whole year of 22 years, and the high profit of the company's copper and cobalt sector can be continued. The Indonesia Huayue project of nickel sector is expected to reach production by the end of June, and the Huake project will be completed and put into operation in the second half of the year, contributing to the increment of resource side performance. The continuous large-scale production of precursor cathode materials complements the profits, and the cycle + Growth Logic continues to be fulfilled.

Employee stock ownership plan restricted stock plays an incentive role to the greatest extent.

On April 26, the company issued a restricted stock incentive plan, which will grant 11.76 million restricted shares to 1412 employees at a price of 42.35 yuan / share, accounting for 0.963% of the total share capital. The conditions for lifting the restrictions on sales are as follows: Taking the performance of 21 years as the base, the growth rate of revenue in 22-24 years is not less than 15% / 30% / 45%, or the cumulative net profit from 22 years is not less than 5 / 11 / 18 billion yuan respectively.

On the same day, the company issued the draft employee stock ownership plan. The number of participants was no more than 287, and the initial fund-raising amount was no more than 443 million yuan. According to the closing price on April 26, the corresponding number of shares held did not exceed 0.53% of the existing share capital. The duration of the shareholding plan is 24 months, including 12 months of lock-in period. The corresponding shares will be purchased from the secondary market within 6 months after the deliberation and approval of the general meeting of shareholders.

The equity industry fund promotes the transformation and upgrading of lithium battery materials. The company acquired 49.47% of the partnership share of Guangxi times lithium new energy materials investment management center with 710 million yuan through acquisition and subscription. Guangxi times lithium battery was established to subscribe for the corresponding industrial fund shares. The investment target of the industrial fund mainly focuses on the fields related to new energy lithium battery materials. This equity participation is in line with the company's positioning of taking the new energy lithium battery industry as the development core, and will promote the company to further realize the transformation and upgrading to new energy lithium battery materials.

Profit forecast and investment suggestions

It is predicted that the net profit attributable to the parent company in 22-24 years will be 5.22/73.0/9.7 billion yuan, a year-on-year increase of + 33.9% / + 40.0% / + 32.9%, and the EPS will be 4.27/5.98/7.94 yuan, corresponding to pe17 / 12 / 9 times. Maintain the "buy" rating.

Risk tips

The demand for new energy was lower than expected, the price of copper, cobalt and nickel fell, exchange risk and project progress were lower than expected.

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