\u3000\u3 China Vanke Co.Ltd(000002) 460 Ganfeng Lithium Co.Ltd(002460) )
Main points:
Company events
The company released the first quarterly report of 2022. In Q1, the company realized an operating revenue of 5.365 billion yuan, a year-on-year increase of 233.91%, a net profit attributable to the parent of 3.525 billion yuan, a year-on-year increase of 640.41%, and a net profit attributable to the parent after deduction of Non Profits of 3.103 billion yuan, a year-on-year increase of 956.40%.
Lithium salt prices continued to rise, contributing to the company’s performance
Benefiting from the high prosperity of the new energy vehicle industry, the lithium price center continued to move upward. In 2022q1, the average market price of battery grade lithium carbonate in China was about 431800 yuan / ton, up 475.23% and + 103.63% respectively on a month on month basis; The average market price of lithium hydroxide was about 376300 yuan / ton, up + 493.19% and + 88.84% respectively on a month on month basis. The sharp rise in the price of lithium salt products helped the company’s gross profit margin, which increased by 41.42% to 66.65% month on month in Q1. In addition, the rise in lithium prices led to the improvement of the performance of the company’s associates and joint ventures, such as rim and lac. The investment income in 2022q1 increased significantly to 443 million yuan, an increase of 13129% and 499% respectively on a month on month basis.
Actively lock in upstream lithium resources and improve the company’s raw material self-sufficiency rate
The company continues to allocate high-quality lithium resources, broaden diversified supply channels of raw materials, and provide resource guarantee for the business development of the middle and lower reaches. Since 2022, the company has signed a strategic framework agreement with Haixi Prefecture of Qinghai Province to improve the development capacity of lithium resources in Haixi Prefecture; Make convertible bond investment in Shanghai jujingui and obtain its songshugang tantalum niobium mine at maturity; The acquired golamina lithium mine in Mali was completed, and the phase I capacity planning of golamina project was updated to an annual output of 506000 tons of lithium concentrate, and the phase II capacity was updated to an annual output of 831000 tons of lithium concentrate; The capacity of MT Marion spodumene project under the joint venture rim is upgraded. The capacity of lithium concentrate is expected to increase to Shanghai Pudong Development Bank Co.Ltd(600000) tons / year by April 2022 and expand to 900000 tons / year by the end of 2022. The self-sufficiency rate of raw materials of the company has been significantly improved.
Steadily expand lithium salt production capacity, and the leading growth of lithium industry can be expected
The company plans to form a lithium product supply capacity with an annual output of 300000 tons of LCE by 2025 and a lithium product supply capacity of no less than Shanghai Pudong Development Bank Co.Ltd(600000) tons of LCE in the future. Overseas, 40000 tons of lithium carbonate in phase I of cauchari olaroz lithium salt lake project is expected to be put into operation in the second half of the year; 20000 tons of lithium chloride capacity in phase I of Mariana lithium salt lake project and 50000 tons of lithium hydroxide capacity in phase I of Sonora lithium clay project are under construction; In China, Jiangxi’s 50000 ton / year lithium battery new energy material project and Yichun’s 7000 ton metal lithium and lithium material project are about to be put into construction. The company actively promotes the large-scale lithium salt project in the middle reaches, and the future growth can be expected.
Investment advice
We expect that the company’s operating revenue from 2022 to 2024 will be 35.54/40.5/48.15 billion yuan respectively, with a year-on-year increase of 218.4% / 12.7% / 20.2%; The corresponding net profit attributable to the parent company was RMB 11.55/13.45/15.63 billion respectively, with a year-on-year increase of 120.8% / 16.4% / 16.2%; PE corresponding to the current share price is 13X / 11x / 10x respectively, maintaining the “buy” rating.
Risk tips
Lithium salt price fluctuation risk, downstream demand is less than expected, project progress is less than expected, and overseas policy change risk.
