\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 899 Zijin Mining Group Company Limited(601899) )
The acquisition of high-quality salt lake assets in Tibet and the new layout of China in the lithium sector Zijin Mining Group Company Limited(601899) announced that it plans to invest in the acquisition of four asset packages of Dunan group (including 70% equity of Tibet arila guocuo Salt Lake Lithium mine and other transaction subject assets), with a total price of 7.682 billion yuan. Among them, the core asset of this acquisition is 100% equity of Jinshi mining, with a price of 4.897 billion yuan. Jinshi mining holds 70% of the equity of Tibet arilaguo resources company, which owns the lagocuo Salt Lake Lithium mine project in Gaize County, Ali, Tibet.
Resources in China is an important consideration factor, and the valuation of the acquisition consideration is reasonable. By sorting out the consideration for the recent acquisition of lithium, we believe that the price of Zijin’s acquisition of lagocuo Salt Lake is reasonable and can achieve better profits in long-term operation. The estimated capacity of 10000 tons acquired is about 1.399 billion yuan, which is at the middle level in medium and large lithium salt lakes / mines with more than 1 million tons of resources. The estimated resource of 10000 tons acquired this time is about 32.692 million yuan, which is also at the lower level in several acquisitions of salt lakes in China.
For the scarce pure lake surface brine resources, the capacity is increased to 50000 tons by adsorption membrane method. The retained resources of lagocuo salt lake are converted into 2.14 million tons of lithium carbonate, the average lithium ion concentration is 270 mg / L, and the ratio of magnesium to lithium is 3.32.
Low magnesium lithium ratio + low impurities, which is conducive to the downward cost of lithium extraction. The ratio of magnesium to lithium in lagocuo Salt Lake is only 3.32, and the impurities are low. Laguocuo has the characteristics of low magnesium, lithium and impurities, which will lead to the lower cost of lithium extraction than other projects.
It is expected to become a lithium salt project with leading production in China, and the cost is in the lower quintile in the world. The reserves of lagocuo Salt Lake in China are at the same level as those of East Taijinar Salt Lake and West Taijinar Salt Lake, higher than Zabuye Salt Lake and Yiliping Salt Lake in Tibet. The production capacity scale is at a high level in China and even in the world.
Maintain profit forecast, target price and investment rating. The reserves of the company’s gold, copper and other metal resources rank among the top in the world. We expect the company’s main projects to be put into operation smoothly in 2022, and do not consider the impact of this acquisition for the time being. We expect EPS to be 0.99, 1.17 and 1.26 yuan / share from 2022 to 2024 respectively. We expect that as the company’s kamoa copper mine and Peggy copper gold mine are put into operation, the company’s net profit will usher in a period of rapid growth. With reference to the valuation level of comparable companies, we will give a PE valuation of 20 times in 2022, corresponding to a reasonable value of 19.80 yuan, and maintain the rating of “better than the market”.
Risk warning. The construction progress of the project is less than expected.
