\u3000\u3 China Vanke Co.Ltd(000002) 466 Tianqi Lithium Corporation(002466) )
Core view
The company released the annual report of 2021: the revenue was 7.663 billion yuan, a year-on-year increase of + 136.56%; The net profit attributable to the parent company was 2.079 billion yuan, a year-on-year increase of + 213.37%; The net profit deducted from non parent company was 1.334 billion yuan, a year-on-year increase of + 203.04%. In 2021, the company's lithium ore output was about 954000 tons, a year-on-year increase of + 64.49%, the sales volume was about 551200 tons, a year-on-year increase of + 56.26%, and the inventory was about 195900 tons, a year-on-year increase of + 5.01%. In addition, the company's existing capacity of lithium deep-processing products is 44800 tons, which is basically in the state of full production and full sales. In 2021, the output of lithium deep-processing products is about 43700 tons, a year-on-year increase of + 14.84%, the sales volume is about 477100 tons, a year-on-year increase of + 33.64%, and the inventory is about 1168 tons, a year-on-year increase of - 22.61%.
The company released the first quarterly report of 2022: the revenue was 5.257 billion yuan, a year-on-year increase of + 481.41%; The net profit attributable to the parent company was 3.328 billion yuan, a year-on-year increase of + 144265%; The net profit deducted from non parent company was 2.834 billion yuan, a year-on-year increase of + 188309%. The company's 22q1 profit increased significantly year-on-year and month on month, mainly because: 1) the volume and price of lithium ore and lithium deep-processing products increased simultaneously; 2) It is expected that the performance of the associated company sqm22q1 will increase significantly year-on-year, and the investment income of the company will increase significantly. In addition, by the end of 2021, the company's asset liability ratio was 58.90%, down 23.42 percentage points from the end of 2020; By the end of the first quarter of 2022, the company's asset liability ratio had further decreased to 51.85%.
The company holds the world's best quality spodumene and lithium salt lake resources, and the performance flexibility is expected to be fully realized
Resource side: the greenbushes lithium mine has an annual capacity of 1.34 million tons of lithium concentrate. The Trp tailings pond project was completed and put into operation in March this year, which can increase the annual capacity of lithium concentrate by 280000 tons. After introducing Igo as a strategic investor, the company indirectly holds 26.01% equity of greenbushes lithium mine, but still controls the mine.
Product side: the company currently has three production bases in China, with a total lithium salt production capacity of about 44800 tons. In addition, the production line of battery grade lithium hydroxide with an annual output of 24000 tons in phase I of quinana project in Australia has entered the trial production stage; Suining Anju battery grade lithium carbonate production line with an annual output of 20000 tons is under construction.
Investment side: the company currently holds sqm23 83% equity. Sqm has an annual capacity of 120000 tons of lithium carbonate. The sales volume of lithium carbonate in 2021 is about 101100 tons, with a year-on-year increase of about 53%. It is expected that the capacity of lithium carbonate will increase to 180000 tons in the first half of 2022. As the second largest shareholder of sqm, the company is expected to obtain higher investment returns from its rapid capacity expansion.
Risk warning: the construction progress of the project does not meet expectations; The production and sales of lithium ore and lithium salt products did not meet expectations.
Investment advice: maintain the "buy" rating.
The profit forecast is raised. It is estimated that the company's revenue from 2022 to 2024 will be 36.447/39.598/40.245 billion yuan respectively, with a year-on-year growth rate of 375.6% / 8.6% / 1.6%; The net profit attributable to the parent company was 14.522/15.355/15.635 billion yuan respectively, with a year-on-year growth rate of 598.6% / 5.7% / 1.8%; Diluted EPS is 9.83/10.40/10.59 yuan respectively, and the corresponding PE of the current stock price is 7.8/7.4/7.2x. Considering that the company has the best spodumene and lithium salt lake resources in the world and has strong production expansion potential at the resource end, which provides a solid raw material guarantee for the expansion of lithium salt production capacity in the middle reaches, the company has ushered in a reversal of fundamentals after surviving the debt crisis, and is expected to fully enjoy the performance flexibility brought by the high boom cycle of the lithium industry and maintain the "buy" rating.
