Securities code: 6 0 3 3 99 securities abbreviation: Jinzhou Jixiang Molybdenum Co.Ltd(603399) Announcement No.: 2022-009 Jinzhou Jixiang Molybdenum Co.Ltd(603399)
Announcement on the reply to the inquiry letter of Shanghai Stock Exchange
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.
Jinzhou Jixiang Molybdenum Co.Ltd(603399) (hereinafter referred to as ” Jinzhou Jixiang Molybdenum Co.Ltd(603399) “, “company” or “listed company”) received the inquiry letter on matters related to Jinzhou Jixiang Molybdenum Co.Ltd(603399) acquisition of 100% equity and related party transactions of Hunan Yongshan Lithium Industry Co., Ltd. (shgh [2022] No. 0012), hereinafter referred to as the “inquiry letter” issued by the management department of listed companies of Shanghai Stock Exchange on January 6, 2022. After receiving the inquiry letter, the board of directors of the company attached great importance to it, earnestly implemented the requirements of the letter, and organized relevant departments of the company to arrange relevant replies. In response to the questions concerned in the inquiry letter, the company replied to the announcement as follows:
1. The announcement shows that the underlying assets are evaluated by income method and asset-based method, and the income method is finally selected as the pricing basis. Among them, the value of the underlying assets evaluated by the income method is 483 million yuan, with a value-added rate of 60.32%; After the asset-based method, the value of the underlying assets was 478 million, with a value-added rate of 58.62%. In the appraisal assumptions, the prices of raw materials and products in 2022 are considered according to the average value of the highest price and average price in the historical period. The prices of raw materials and products in 2023 and subsequent periods are predicted with reference to the average price of raw materials and products in the historical period up to the date of issuance of the appraisal report. Your company is requested to make supplementary disclosure: (1) according to the price fluctuation of spodumene, sodium hydroxide and lithium carbonate in recent three years, and conclude comparable transactions in the contract industry, explain the rationality of the evaluation assumptions on the price of raw materials and products; (2) In combination with the on-hand orders and future product price changes, explain the determination method of the main parameters such as the future expected income, operating income and discount rate of the subject asset and the rationality of the evaluation and calculation process. Accountants and appraisers are invited to express their opinions.
reply:
(1) According to the price fluctuation of spodumene, lithium hydroxide and lithium carbonate in the historical period and the conclusion of comparable transactions in the contract industry, explain the rationality of the assumptions for the price evaluation of raw materials and products.
As of the date of issuance of the appraisal report, the price fluctuation of spodumene is shown in the figure below:
Li2O 6%
Unit: USD / ton
one thousand and six hundred
one thousand and four hundred
one thousand and two hundred
one thousand
eight hundred
six hundred
four hundred
two hundred
0
As of October 8, 2018, April 8, 2019, October 8, 2019, October 8, 2020, April 8, 2020, October 8, 2021, April 8, 2021, October 8, 2018, the price fluctuation of lithium hydroxide is shown in the figure below:
LiOH 56.5%, magnetic 0.0001
Unit: yuan / ton
200000 150000 100000
fifty thousand
0
As of October 8, 2018, April 8, 2019, October 8, 2019, October 8, 2020, April 8, 2020, October 8, 2021, April 8, 2021, October 8, 2018, the price fluctuation of lithium carbonate is shown in the figure below:
LiCO3 99.5%
Unit: yuan / ton
250000 200000 150000 100000
fifty thousand
0
2018 / 10 / 8 2019 / 4 / 8 2019 / 10 / 8 2020 / 4 / 8 2020 / 10 / 8 2021 / 4 / 8 2021 / 10 / 8 note: the above data comes from Asian metal network. Since October 1 to October 7 are holidays, there is no relevant number
Therefore, the period shown in the above price fluctuation chart for the past three years is from October 8, 2018 to October 29, 2021. As can be seen from the above three figures, the price changes of spodumene (raw materials), lithium hydroxide and lithium carbonate (products) in the three years before the base date generally showed a trend of first falling and then rising, but there were slight differences in the range and speed of rise and fall.
In the income method evaluation of the equity value of Hunan Yongshan Lithium Industry Co., Ltd. (hereinafter referred to as the “target company” or “Yongshan lithium”), the appraiser adopted two assumptions: short-term prediction assumption and long-term prediction assumption for the prices of raw materials and products during the prediction period. Of which:
① Short term price change forecast (from the benchmark date to the end of 2022)
In the short term, due to the rapid growth of power battery demand including lithium battery caused by the rapid development of downstream new energy vehicle industry in recent years, the investment in upstream lithium battery material ore resources and downstream processing capacity has increased on a large scale; At the same time, since the covid-19 epidemic, affected by factors such as limited international logistics capacity and rising freight rates, as well as the increase of ore delivery prices by lithium ore suppliers, the price of raw materials at the purchasing end of lithium battery raw material processing plant (the industry in which the target company is located) has been rising, and the price of its products has also been rising. In this income method evaluation, according to the construction plan and actual progress of the subject company, it is predicted that the production line under construction of the subject company will be put into operation by the end of June 2022.
From the historical period to the appraisal base date, although the prices of spodumene (raw materials), lithium hydroxide and lithium carbonate (finished products) have gone through the process of going down first and then rising continuously, and the trend of high prices from the base date to the issuance date of the appraisal report can still be observed and predicted in the short term. At the same time, according to the price trend cycle of ore, the mainstream status of lithium extraction and processing of spodumene, and the continuous improvement of the penetration rate of global new energy vehicles, the management and appraisers of the subject company believe that the prices of spodumene, lithium hydroxide and lithium carbonate are likely to be at a high price from then on to the end of 2022, but the relative maximum price will fall slightly.
In addition, since the prices of spodumene, lithium hydroxide and lithium carbonate have been at a low point in the second half of 2020, if only referring to the average value of price statistics in recent three years, it will seriously deviate from the overall price level in the short term, resulting in a large deviation in the price forecast of raw materials and products in 2022.
Therefore, combined with the above two factors, the prices of raw materials and products after the production line of the target company is put into operation in 2022 are predicted according to the average value of the highest price and average price in the historical period, which not only combines the analysis of the price changes of relevant raw materials and products in the historical period, but also reflects the reasonable judgment of the price change trend in the short term (9-18 months) after the period, Reasonable.
② Long term price change forecast (2023 to sustainability period)
The main business of the target company is to purchase spodumene to produce and sell two main raw materials for lithium batteries: lithium hydroxide and lithium carbonate.
According to the forecast, the production line under construction of the subject company will be put into operation at the end of June 2022. Considering that the target company does not hold upstream mineral resources, nor does it have investment planning for the production and processing of new products that further extend existing products to downstream customers, and is limited by its own overall investment and capacity investment and construction scale, in the long run, the target company is not expected to hoard a large number of raw materials in the period of low prices by means of futures or trade, And the extreme inventory management strategy of intensive shipment when the product price is high. Therefore, during the period from 2023 to sustainability, the price changes of raw materials and products of the target company will be mainly affected by the price cycle changes and long-term change trend of the industry.
As for long-term price changes, it is impossible to accurately predict the specific period, and historically, the price of lithium ore processing products also has a periodic fluctuation law of “decline rise”. Therefore, the price of the target company’s products will eventually be affected by the supply-demand relationship of the new energy vehicle market, and there is little possibility of long-term sustained unilateral rise. Based on the above judgment, the management and appraisers of the subject company predict that after the rapid rise stage in the early stage, the prices of lithium hydroxide and lithium carbonate are expected to enter the next round of price adjustment stage in 2023, and follow the cyclical law of the impact of market supply and demand on price changes in the long term. In addition, according to the price statistics in the historical period, the prices of lithium hydroxide, lithium carbonate and spodumene show a basically synchronous trend. Therefore, the price of raw materials and products during the period from 2023 to sustainability is predicted with reference to the average price of raw materials and products in the historical period up to the date of issuance of the appraisal report, which reflects the analysis and judgment of the price fluctuation law in the historical period and the trend of the future price cycle under the condition that the long-term price change cannot be accurately predicted, It is reasonable to make a reasonable trend forecast for long-term prices.
For example, Guangdong Weihua Co., Ltd. (002240. SZ, now renamed ” Chengxin Lithium Group Co.Ltd(002240) “) intends to issue shares to purchase shares of Sichuan shengtun Lithium Industry Co., Ltd. in the information disclosed to the public, the reply of Guangdong Weihua Co., Ltd. to the notice on the first feedback on the review of administrative licensing projects by the CSRC (No. 191645), Taking December 31, 2018 as the appraisal base date, the appraisal institution selected the average price of similar grade spodumene concentrate in the five years before the appraisal base date as the product price assumption within the prediction period. Although Weihua’s acquisition of Sichuan shengtun lithium industry is a mining project, and this Jinzhou Jixiang Molybdenum Co.Ltd(603399) acquisition of Hunan Yongshan is a lithium salt processing project, the value principle of product price in the prediction period is the same. In addition, the project comprehensively considers the current situation of lithium salt processing industry, adopts the combination of short-term price prediction and long-term price prediction, and combines qualitative judgment and quantitative analysis in pricing, which is more detailed and cautious.
Similar to the transaction period, for example, Yabao plans to acquire Guangxi Tianyuan new energy materials Co., Ltd. (latest announcement: 2021 / 9 / 30), a wholly-owned subsidiary of Jinyuan Ep Co.Ltd(000546) and 51% equity of lithium industry (latest announcement: 2021 / 10 / 13). The assumptions and logic of raw material and product price prediction are not explained in the public disclosure information of the two M & A transactions, Therefore, the price assumptions involved in recent transactions in the same industry have no public information for the appraiser to compare and analyze.
To sum up, the above assumption of combining short-term price forecast and long-term price forecast is adopted for the raw materials and product prices of the target company during the forecast period, which not only takes into account the impact of the law and trend of price change in the historical period on short-term price change, but also smoothes the impact of periodic price fluctuation and high short-term price on long-term price change, It is in line with the evaluation principle of neutral and independent assumptions for the prediction period of income method evaluation, and is reasonable. (2) In combination with the on-hand orders and future product price changes, explain the determination method of the main parameters such as the future expected income, operating income and discount rate of the subject asset and the rationality of the evaluation and calculation process.
① Orders in hand
Up to now, the subject company is a project under construction and has not obtained a formal order in hand. There is uncertainty in the future revenue and profit. The existing letters of intent and OEM orders are as follows:
A. Letter of intent for production of battery grade lithium hydroxide and battery grade lithium carbonate
The target company is currently under construction and has no orders in hand in the production of battery grade lithium hydroxide and battery grade lithium carbonate. The target company signed a letter of intent with BASF (China) Co., Ltd. (hereinafter referred to as “BASF”) to agree that the target company will supply in batches to all relevant production bases of BASF battery materials after being put into operation, including battery grade lithium hydroxide and battery grade lithium carbonate products. The management of the target company expects that there is no obstacle to signing the supply contract with BASF after it is put into operation.
B. Battery grade lithium carbonate (OEM) business order
The order is the entrusted processing contract signed by the target company and honeycomb Energy Technology Co., Ltd. (hereinafter referred to as “honeycomb energy”), which stipulates that the client provides spodumene or industrial lithium salt, which is processed into battery grade lithium salt products by the target company, and a certain processing fee is charged.
② Determination method of future product price change and operating income
During the forecast period, the main businesses of the target company are battery grade lithium hydroxide production, battery grade lithium carbonate production and battery grade lithium carbonate OEM, of which the first two are “purchase production sales” mode and the last is OEM mode.
In this evaluation, the main prediction mode of sales revenue under the “purchase production sales” and OEM modes is “sales unit price” × Sales volume “, the sales unit price and sales volume are slightly different for different product businesses, including: A. battery grade lithium hydroxide production and battery grade lithium carbonate production
The estimated sales unit price is predicted according to the market price in the reply to question 1 / (1); The estimated sales volume takes into account the impact of on-hand orders, future customer expansion, ore raw material supply, trial production progress, technical process and other factors on the production and sales of the target company.
B. Battery grade lithium carbonate OEM mode
The estimated unit processing fee refers to the price agreed in the signed contract; The estimated sales volume comprehensively considers the estimated capacity of the target company, and reasonably arranges the production and reasonably maximizes the output on the basis of giving priority to the independent production of the target company.
③ Determination method of operating cost
In this appraisal, the operating cost prediction model of the three types of businesses is “unit cost” × Sales volume “, and its unit cost composition is as follows:
A. Production of battery grade lithium hydroxide and battery grade lithium carbonate
The unit cost mainly includes spodumene, various auxiliary materials and power costs, labor costs and depreciation. Among them, spodumene, various auxiliary materials and power costs are predicted according to the fixed ton consumption and its market price, the labor cost is predicted in combination with the local wage level, and the depreciation is predicted according to the planned capital investment and depreciation life of the corresponding production line and plant. B. Battery grade lithium carbonate OEM mode
Unit cost main package
