\u3000\u3 China Vanke Co.Ltd(000002) 466 Tianqi Lithium Corporation(002466) )
Event: the company released its 2021 annual report and the first quarterly report of 2022: in 2021, the company achieved a total operating revenue of 7.663 billion yuan, a year-on-year increase of 136.56%; The net profit attributable to the shareholders of the listed company was 2.079 billion yuan, a year-on-year turnaround. In the first quarter of 2022, the company achieved a total operating revenue of 5.257 billion yuan, a year-on-year increase of 481.41%; The net profit attributable to shareholders of listed companies was 3.328 billion yuan, reversing losses year-on-year. Comments: the performance improved significantly in 2021, mainly due to the simultaneous rise in the volume and price of lithium products: in 2021, the sales of lithium concentrate and lithium salt of the company were 551000 tons and 47700 tons respectively, with a year-on-year increase of 56.26% and 33.64%; In 2021, the average prices of battery grade lithium carbonate and lithium hydroxide were 117000 yuan / ton and 110700 yuan / ton respectively, with a year-on-year increase of 163% and 113%.
In the first quarter of 2022, the company's net profit attributable to the parent company hit a new record and reversed its losses year-on-year. In addition to the year-on-year increase in the price of lithium salt products, it also benefited from the increase in the investment income of sqm, an associated company, and the investment income brought by the financial assets recognized by SES as measured at fair value and whose changes are included in other comprehensive income. The long-term equity lithium compound production capacity exceeds 150000 tons / year, an increase of about 98% over the end of 2021: the annual output of 48000 tons of lithium hydroxide project in quinana, Australia and the annual output of 20000 tons of lithium carbonate project in Suining Anju are in the trial production or construction stage, and the 2000 tons of metal lithium project in Tongliang, Chongqing is in the planning and construction stage; Sqm's annual report shows that by 2023, it will further increase the capacity of lithium carbonate and lithium hydroxide to 210000 tons and 40000 tons respectively. According to our calculation, the company's equity lithium compound production capacity is expected to be 157000 T / A in 2025, an increase of about 98% compared with 79000 T / a at the end of 2021. According to our calculation, 157000 tons is equivalent to about 10% of the global lithium salt supply in 2025.
In March, the penetration rate of China's electric vehicles continued to rise, and the lithium price is expected to fluctuate at a high level: according to the data of China Automobile Association, in March 2022, the production of Shanxi Guoxin Energy Corporation Limited(600617) vehicles reached 465000, and the production penetration rate reached 20.7%, a record high. The price of lithium has been adjusted back recently. As of April 22, 2022, the price of lithium carbonate has been adjusted back to 482000 yuan / ton, and the price has decreased by 4.5% in recent 30 days, but it is still at a historically high position. According to academician Ouyang Minggao pointed out at the electric vehicle hundred people's meeting forum, "it is expected that the balance between supply and demand of lithium resources may return to normal in 2-3 years". We believe that the tension between supply and demand makes lithium prices still expected to remain high and volatile.
Profit forecast and rating: in view of the expansion of the company's future production capacity, we raised the profit forecast. It is estimated that the EPS in 20222023 will be 7.33 yuan and 8.26 yuan respectively, up 43.7% / 23.5% respectively, and the new profit forecast in 2024 will be 10.93 yuan, corresponding to 10x / 9x / 7X in 20222024pe. In view of the company's leading position in the global industry and the gradual improvement of its capital structure, we maintain the "overweight" rating.
Risk warning: downstream demand is less than expected; The supply side capacity of the industry is released too quickly; Debt liquidity risk; The project construction of the company is less than expected; Safety and environmental protection risks; Overseas operation risk; Technology path change risk, etc.
