\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 90 Suzhou Ta&A Ultra Clean Technology Co.Ltd(300390) )
Event: the company released the first quarterly report of 2022, with an operating revenue of 3.388 billion yuan in 2022q1, a year-on-year increase of 407.15% and a month on month increase of 215%. The net profit attributable to the parent company in 2022q1 was 1.518 billion yuan, with a year-on-year increase of 939.05% and a month on month increase of 321.31%. In 2022q1, the net profit not attributable to the parent company was 1.513 billion yuan, a year-on-year increase of 126005% and a month on month increase of 316.95%.
Lithium salt business volume and price increased simultaneously, boosting the company’s gross profit. (1) Volume: the subsidiary Tianyi lithium industry (the holding right has been increased to 75%) has reached the production capacity of 20000 tons in phase I. thanks to the production of 25000 tons in phase II, it will be produced and sold in Q1 in 2022 or effectively released. (2) Price: the average price of Q1 battery grade lithium hydroxide including tax is 377000 yuan / ton, with a year-on-year increase of + 525.8% and a month on month increase of + 98.1%. (3) Gross profit: in 2022, the gross profit of Q1 company was 2.599 billion yuan, an increase of 262.9% month on month; The gross profit margin was 76.7%, an increase of 10.13 PCT month on month.
During this period, the decrease of expense rate is good for the release of operating profit, and the investment value of avz continues to be verified by the market. In 2022, Q1 four fees and taxes totaled 164 million yuan, down 4.22 PCT year-on-year and 3.26 PCT month on month. In addition, Tianyi lithium holds 7.29% of the equity of avz. Thanks to the continuous upward premium at the mine end and the good expectation of Manono volume, the share price of Q1 avz increased from a $0.775/share to a $1.235/share in 2021. The company confirmed that the change in the fair value of relevant other equity instruments was 792 million yuan, which was included in other comprehensive income.
On the resource side, it is now dominated by underwriting concentrate, the core resource Manono can be expected in the future, and other lithium resources are arranged at the same time. (1) From 2021 to 2023, the company holds the sales volume of AMG 6 Shenzhen Tagen Group Co.Ltd(000090) 000 T / a package. At the same time, both parties agree that they can choose to extend it for another two years. (2) From 2022 to 2024, Pilbara underwrites 115000 tons of lithium concentrate every year. (3) The mining and beneficiation capacity of Manono is planned to be 10 million tons / year, corresponding to the capacity of 1.6 million tons of lithium concentrate. In terms of underwriting, after the completion of Tianhua times’ acquisition of 24% equity of Manono, Tianyi lithium will transfer the rights and obligations of the original off take agreement to Tianhua times, which has a package sales volume of 800000 tons / year and a lower 50% output of Manono. In the future, Tianhua times will supply spodumene concentrate to Tianyi lithium for a long time according to the needs of Tianyi lithium, with a supply quantity of no less than 200000 tons / year. (4) Tianyi lithium signed an underwriting agreement with universal lithium to acquire 9.9% equity of universal lithium and sign a 10-year spodumene concentrate underwriting agreement. (5) Suzhou Ta&A Ultra Clean Technology Co.Ltd(300390) intends to subscribe for the equity of premier and obtain the off take right of lithium concentrate of Zulu feasibility study project.
The lithium hydroxide production capacity is planned to be about 160000 tons, and the binding Contemporary Amperex Technology Co.Limited(300750) growth attribute is obvious. (1) The first phase of Tianyi lithium industry has a capacity of 20000 tons of lithium hydroxide, and the design capacity of 5000 tons will be added after the completion of the supporting technical transformation project; The phase II 25000 ton battery grade lithium hydroxide project has entered the stage of commissioning and trial production and produced qualified products. At the same time, the 50000 ton capacity of Jiang’an base and 60000 ton capacity of Meishan base will be completed by stages by the end of 24. At that time, the total capacity of lithium hydroxide of the company will reach 160000 tons per year. (2) It is proposed to invest in a 100000 ton lithium carbonate smelting capacity project with Contemporary Amperex Technology Co.Limited(300750) joint venture, which is the company’s first production of lithium carbonate and will increase 10000 tons of lithium salt equity capacity. (3) Suzhou Ta&A Ultra Clean Technology Co.Ltd(300390) and Contemporary Amperex Technology Co.Limited(300750) have close cooperation in equity, resources and smelting, and the smelting capacity may be continuously released.
Investment suggestion: we expect the company’s operating revenue to be 17.199 billion yuan, 23.879 billion yuan and 29.199 billion yuan respectively from 2022 to 2024, and its net profit to be 3.956 billion yuan, 4.438 billion yuan and 5.752 billion yuan respectively, with corresponding EPS of 6.73, 7.55 and 9.78 yuan / share respectively. At present, the corresponding share price of PE is 9.1, 8.1 and 6.3 times. Maintain the “overweight-a” rating, and the six-month target price is 80 yuan / share.
Risk tip: lithium price is lower than expected, demand is lower than expected, and project progress is lower than expected
