\u3000\u3 China Vanke Co.Ltd(000002) 738 Sinomine Resource Group Co.Ltd(002738) )
Event: the company released its 2021 annual report and 2022q1 quarterly report. In 2021, the company achieved a revenue of 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%. In 2022q1, the company achieved a revenue of 1.848 billion yuan, with a synchronous increase of 399.02% and a month on month increase of 84.98%; The net profit attributable to the parent company was 775 million yuan, an increase of 848.73% year-on-year and 202.73% month on month.
Comments:
Sinomine Resource Group Co.Ltd(002738) shift lithium salt, outstanding performance. In 2021, the company’s lithium salt business achieved a revenue of 942 million yuan, a year-on-year increase of 393.42%, cesium rubidium salt achieved a revenue of 811 million yuan, a year-on-year increase of 59.41%, and geological exploration and other businesses achieved a revenue of 641 million yuan, a year-on-year increase of 11.33%. According to the average price of 116000 yuan / ton of smm2021 lithium carbonate, assuming that the processing cost is 15000 yuan / ton, it is estimated that the cost of lithium concentrate of the company’s lithium carbonate / lithium hydroxide will be about 600 dollars in 2021 (the average price of SMM is 900 dollars). According to the average price of SMM lithium carbonate Q1 of 422000 yuan and the average price of Baichuan information lithium fluoride Q1 of 682000 yuan / ton, the company’s lithium carbonate / lithium hydroxide Q1 revenue is expected to be 1.123 billion yuan, with a gross profit of 623 million yuan, lithium fluoride Q1 revenue of 483 million yuan and a gross profit of 200 million yuan.
The output of lithium salt has increased steadily. It is estimated that the output will reach 20000 tons in 2022 and 60000 tons in 2025, ranking first in China. In 2021, the company’s 25000 ton battery grade lithium hydroxide and battery grade lithium carbonate production line was ignited and put into trial production and operation in August 2021. At present, it is in the climbing stage. At the same time, the company has completed the expansion of the lithium fluoride production line from 3000 tons / year to 6000 tons / year. In February 2022, the company invested 1 billion yuan to build a high-purity lithium salt project with an annual output of 35000 tons, which is expected to be put into operation by the end of 2023 Sinomine Resource Group Co.Ltd(002738) the pre expansion production capacity is only 25000 tons, and China’s lithium salt ranks lower. After 35000 tons are put into operation, the company’s total equity production capacity will reach 60000 tons, jumping to the first-class level of China’s lithium salt plant.
The layout of lithium resources will blossom in many places. In 2025, the raw ore output will reach 3 million tons, and the self-sufficiency rate of lithium resources will be 83%. (1) Acquisition of bikita. At present, the beneficiation capacity of bikita is 700000 tons / year. The company is studying the production expansion plan of 1.05-2 million tons / year. The lithium reserve of bikita is 344000 tons of Li2O. (2) 120000 tons of spodumene beneficiation in the company’s Tanco mine has been put into operation, and 500000 tons are planned in the long term, of which 180000 tons are expected to be put into operation by the end of 2022. The reserve of Li2O in Tanco mine is 112200 tons. (3) Take shares in PWM and seize the resource track. The company plans to subscribe for Canadian pmw5 in December 72% equity. Within three months after the completion of the transaction, China Mining Hong Kong and PWM signed an underwriting agreement for all lithium, cesium and tantalum products of the case Lake project. (4) With an investment of 72.3 million yuan, the exploration work of lithium mine in bikita mining area, lithium cesium tantalum mine in Tanco mining area and kasenpa gold mine in Zambia will be intensified, and the resource reserves are expected to exceed expectations.
Cesium rubidium salt leaders enjoy excess profits, and high oil prices drive strong demand for cesium formate. The company is the most complete manufacturer of cesium industry chain in the world. It has the ability to mine and process cesium garnet, produce fine chemical products and provide product technical services. The company owns the world’s only cesium resource mines: Tanco mine and bikita mine in Canada, which are well deserved leaders of cesium rubidium salt. At the same time, the global energy shortage is becoming more and more intense, the high shock of crude oil price drives the demand for cesium formate, and the company has a strong demand for cesium formate orders.
Investment suggestion: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 3.482/4.482/5.205 billion yuan, with a year-on-year increase of 523.8% / 28.7% / 16.1%, corresponding to EPS of 10.7/13.8/16.0 yuan / share and PE of 6.18/4.8%/ 4.1 times. Compared with the current valuation of lithium salt enterprises, the valuation of the company is at a low level. It is estimated that the market value of the company will reach 44.8 billion and the corresponding share price is 137.8 yuan / share, maintaining the “buy” rating.
Risk tip: the expansion of production is less than expected, the lithium price fluctuates sharply, the downstream demand is less than expected, and the macroeconomic policy changes.
