\u3000\u30 Shenzhen Quanxinhao Co.Ltd(000007) 62 Tibet Mineral Development Co.Ltd(000762) )
Event: on April 28, the company released 2021 annual report and 22q1 quarterly report. In 2021, the operating income was 644 million yuan, a year-on-year increase of 68.2%, and the net profit attributable to the parent company was 140 million yuan, a year-on-year increase of 189 million yuan. 2021q4 achieved a revenue of 207 million yuan, an increase of 67.2% year-on-year and a decrease of 1.4% month on month; The net profit attributable to the parent company was 12 million yuan, turning losses into profits year-on-year, with a month on month decrease of 85.6%. In 2022q1, the operating revenue was RMB 353 million, a year-on-year increase of 159.2%, and the net profit attributable to the parent company was RMB 132 million, a year-on-year increase of 557.7%.
The volume and price of main businesses have risen simultaneously, contributing to the release of performance in 2021 and 22q1. (1) Lithium: in 2021, the company’s lithium products achieved a revenue of 324 million yuan, a year-on-year increase of 135506%, and the revenue and gross profit accounted for 50.24% and 52.54%. Benefiting from Zabuye phase I technical transformation, the annual output of lithium concentrate in 2021 was 9016 tons, with a year-on-year increase of 96%; (2) Chromium: in 2021, the company’s income from chromium products reached 316 million yuan, a year-on-year increase of 0.25%; The gross profit was 169 million yuan, a year-on-year increase of 720.56%, and the revenue and gross profit accounted for 49.08% and 47.10%. The annual output of chromium products was 141000 tons, with a significant year-on-year increase of 24.2%. (3) The company is expected to benefit from the strong demand for lithium concentrate at the end of 2021 and 2022, driven by the strong demand for lithium concentrate at the end of 2022. It is expected that the company will benefit from the substantial increase in the price of lithium concentrate at the end of 2022.
Excellent resource endowment brings significant cost advantages, and China’s local high-quality lithium resources will be strategically revalued. (1) Zabuye Salt Lake is rich in a variety of metal resources, and the lithium grade ranks second in the world. At present, preparations for Zabuye phase II project are progressing smoothly, and 12000 tons of lithium carbonate capacity may be completed and put into operation in 2023. With the improvement of financial, technical and management support after Baowu takes over, it is expected that the development of Zabuye Salt Lake will be greatly accelerated. (2) According to the feasibility study, the full cost of the phase II project after deducting depreciation and various expenses is 42500 yuan / ton, and the full cost after deducting the income of by-products is 24100 yuan / ton. The cost of lithium extraction is lower than that of Qinghai Salt Lake, and it is on the left side of the global salt lake lithium extraction cost curve. The profitability can be expected. (3) China’s lithium resources are highly dependent on imports from Australia. At present, China’s salt lake lithium resources account for 70%, Tibet is rich in salt lake brine lithium resources. The development of Zabuye Salt Lake is expected to lead the breakthrough of Tibet Salt Lake development from 0 to 1. Under the goal of independent and controllable resources, the strategic value of lithium extraction from China’s salt lakes has been revalued.
The investment plan from 2022 to 2027 is clear, and the growth of chromium lithium development leader can be expected. In 2022, the company will strive to occupy 5% of China’s salt lake lithium salt market by continuously increasing the output of Zabuye phase I lithium concentrate and LUOBUSHA chromium mine. Eliminate the company’s investment plan from 2021 to 2027, and the total planned investment of the company’s long-term investment projects from 2021 to 2024 is 785 million yuan; The total planned investment in fixed asset investment projects is 6.150 billion yuan. With the substantial increase of capital expenditure, the company expects to form a lithium salt scale of 3 Tianma Microelectronics Co.Ltd(000050) 000 tons in 2025.
Investment suggestion: high quality chromite resources contribute to stable gross profit, and Zabuye phase II salt lake lithium extraction project opens up future growth space. We raised the forecast of the company’s net profit attributable to the parent company from 2022 to 2024 to 747 million yuan, 1049 million yuan and 1546 million yuan, corresponding to the closing price on April 29, 2022. The PE from 2022 to 2024 was 23, 17 and 11 times in turn, maintaining the “recommended” rating.
Risk warning: the terminal demand is less than expected; Lithium prices fell sharply; The project is not progressing as expected.
