\u3000\u3 Shengda Resources Co.Ltd(000603) 906 Jiangsu Lopal Tech.Co.Ltd(603906) )
Performance
On April 28, the company released its first quarterly report. The company achieved an operating revenue of 2.558 billion yuan, a year-on-year increase of 330%, and a net profit attributable to the parent company of 213 million yuan, a year-on-year increase of 252%.
Analysis
Lithium iron phosphate maintained a high boom, superimposed on inventory income, and the company’s lithium iron phosphate business increased significantly. In the first quarter, the company realized a net profit attributable to the parent company of 213 million yuan, with a significant increase in the same month on month. The overall operation of the company was relatively stable, and its business was not greatly affected by the epidemic. In the first quarter, the company’s main product lithium iron phosphate still maintained a high momentum. In the first quarter, the company’s phase I project of Sichuan base was put into operation, which led to the company’s sales of lithium iron phosphate increased by more than 2000 tons month on month, and the sales volume increased steadily. At the same time, the price of lithium carbonate, the main raw material of lithium iron phosphate, was still in the rapid upward stage in the first quarter. In order to ensure safe operation, the company carried out some inventory of lithium carbonate, Therefore, superimposed on the high product boom and inventory income, lithium carbonate contributed to the core profit of the company in the first quarter, forming a substantial growth.
The price of vehicle urea increased slightly with the support of cost. Since the second half of 2021, due to the significant increase in energy prices, the price of granular urea has increased significantly. As the main raw material of the company’s vehicle urea, the cost pressure of the product has increased. In the first quarter of this year, the price of raw material granular urea is still at a high level. According to the average market price in Jiangsu, the price of granular urea has increased by about 90 yuan / ton month on month, while the average sales price of the company’s vehicle urea has increased by about 13 yuan / ton. In the first quarter, the company’s vehicle urea bases were put into operation successively, and the proportion of vehicle urea outsourced in the first quarter decreased significantly. The base layout in multiple regions across the country is expected to gradually optimize the company’s production and transportation costs. It is expected that vehicle urea will maintain a relatively stable operation in the short term.
New projects are expected to be put into operation this year, and the layout of differentiated products is expected to enhance the company’s industrial competitiveness. Since last year, the company has continuously accelerated the layout of lithium iron phosphate production capacity, successively built lithium iron phosphate production capacity in Sichuan, Shandong and other places, and built raw iron phosphate production capacity in Sichuan, Hubei and Shandong to accelerate market expansion. With the gradual production of multiple bases of the company this year, the quarterly output of the company will be gradually increased, and the improvement of the industrial chain will further optimize the production cost. On this basis, the company has also arranged Tieli No. 1 products and ferromanganese lithium products with good low-temperature performance and rapid charge and discharge performance, which form a differentiated supplement to the existing high-voltage solid density products, so as to continuously improve the market influence and competitiveness of the company.
Investment advice
The company grasps the demand trend of lithium iron phosphate and accelerates the construction of production capacity. With the increase of production capacity, the company is expected to enter the fast lane of development. It is predicted that the net profit attributable to the parent company from 2022 to 2024 will be 768 million yuan, 904 million yuan and 1006 million yuan respectively, corresponding to 18, 16 and 14 times of PE, maintaining the rating of “overweight”.
Risk tips
The construction process of new production capacity did not meet expectations, and the intensification of industrial competition led to the reduction of industrial profits and risks.
