\u3000\u3 Shengda Resources Co.Ltd(000603) 799 Zhejiang Huayou Cobalt Co.Ltd(603799) )
Overview of the event: (1) on April 27, the company released the draft of employee stock ownership and equity incentive: the employee stock ownership plan is calculated at the closing price of 68.94 yuan / share on April 26, the upper limit of scale is 6.4259 million shares, and the total amount of funds to be raised is no more than 443 million yuan; The number of restricted shares to be granted under equity incentive is 11764500, including 9411600 shares for the first time, with the grant price of 42.35 yuan per share. (2) On April 27, the company issued an announcement on foreign investment, which proposed to acquire 45% of the partnership share of Guangxi times lithium battery with 597 million yuan, and to subscribe for the new partnership share with 1.135 billion yuan. (3) On April 29, the company announced that it had signed a cooperation framework agreement with vale Indonesia to jointly develop Indonesia’s nickel resources, and the project planned to produce 120000 gold tons of MHP products.
Analysis and judgment: employee stock ownership + equity incentive work together to highlight the company’s confidence in the future under the deep binding. (1) From the perspective of unlocking conditions of equity incentive, the annual net profit from 2022 to 2024 will not be less than 5 billion, 6 billion and 7 billion respectively. The future performance growth of the company has a foundation and the path is becoming clearer; (2) From the perspective of the scope of employees involved, the scope of ESOP and equity incentive includes the directors, supervisors, senior managers and core technicians of the company, with 287 and 1412 people respectively, covering a wide range; (3) In terms of form, the annual reduction proportion of equity incentive is limited, and individual income tax needs to be paid at the same time. Therefore, increasing the matching of employee stock ownership plan can deeply bind the core personnel.
Take a stake in Guangxi times lithium battery and increase the layout of lithium battery materials. (1) The project under construction of Guangxi Shidai lithium battery is a 700000 ton lithium battery new energy materials integration industrial base project, which is arranged from refining, chemical industry to materials integration industrial chain. The total investment of the project is about 130 billion. It is planned to have an annual output of 700000 tons of ternary cathode materials, 500000 tons of lithium iron phosphate, 100000 tons of copper foil and 30000 tons of lithium cobalt. After the completion of the project, Yulin is expected to become the largest lithium manufacturing base in the world. (2) After the completion of this transaction, the shareholding ratio of the company is 49.47%, which means that the company is further from the goal of building 500000 tons of cathode material + 1 million tons of lithium iron phosphate + 1 million tons of precursor in 2025. It is also the content of the company’s “ten-year strategy and five-year completion”, and the future growth path of the company is becoming clearer. (3) From the perspective of other potential projects, the major shareholders of the company also have Zhejiang times lithium battery in Quzhou, with an annual output of 400000 tons of lithium battery ternary precursor and 300000 tons of lithium battery cathode materials, with a total investment of 32.59 billion yuan. At present, it is also under construction.
Join hands with vale to the optimal combination of resources + technology. Based on the company’s proven wet process, technology and configuration, the company plans to build a high-pressure acid leaching wet process project with an annual capacity of 120000 tons of nickel metal to produce MHP. Vale exclusively supplies limonite for project production, and the shareholding ratio can be up to 30%. The company plans to underwrite 100% of MHP products. If vale shares, it will underwrite according to the shareholding ratio in the future. At present, the capacity of the company’s nickel project completed and under construction is “6 + 4.5 + 12”, with a total of 225000 tons. If the previous joint venture project with Volkswagen and this layout are added, the nickel capacity is expected to reach 465000 tons in the future, and the nickel resources are expected to be self-sufficient.
Investment suggestion: the company’s upstream resource layout is perfect, and the downstream lithium battery material production expansion is promoted smoothly. It is expected to be in large quantities quickly, and is deeply bound with international resources and automobile giants. It has high growth certainty and deep moat. We maintain the company’s net profit attributable to the parent company from 2022 to 2024 at 6.218 billion yuan, 9.152 billion yuan and 11.781 billion yuan. Based on the closing price on April 29, 2022, PE is 16x, 11x and 9x respectively, maintaining the “recommended” rating.
Risk tip: the price of copper, cobalt and nickel has fallen sharply, the progress of its own project is lower than expected, the demand has declined, etc.
