\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 19 Cngr Advanced Material Co.Ltd(300919) )
Event: Zhongwei Hong Kong subsidiary Xingquan, Xingqiu and Xingxin signed the joint venture agreement on the project of smelting 40000 tons of high matte nickel containing metal (Indonesia) in laterite nickel ore with rigqueza respectively. Three Zhongwei Hong Kong subsidiaries set up joint ventures with rigqueza respectively, of which Zhongwei Hong Kong subsidiary holds 70% and rigqueza holds 30%. They plan to invest 420 million yuan respectively in the construction of the production capacity of smelting 40000 tons of high matte nickel in laterite nickel ore in IWIP, The total investment is 1.26 billion US dollars to build 120000 tons of pyrometallurgical smelting capacity.
Overweight the layout of nickel smelting capacity, effectively improve the company’s cost competitiveness and become a new driving force for the company’s performance. The company cooperates with Castle Peak to build 120000 tons of pyrometallurgical nickel smelting capacity. The capacity planning is huge. The investment per ton is US $10500 / gold ton, which is slightly lower than the previous investment of about US $11000 / gold ton. According to the conservative nickel price calculation, we expect to contribute about 2.5 billion to the parent company’s net profit after the completion of the project, which will become the driving force of the company’s new performance. The company’s existing 20000 ton nickel smelting project in phase I is progressing smoothly. The company expects to be gradually completed and put into operation in Q3 in 2022, and the phase II project will be launched simultaneously. We expect that 40000 tons in phase II will be put into operation in Q1 in 2023, and 60000 tons of nickel smelting capacity (42000 tons of equity) will be available in 2023, which is expected to contribute to new performance increment. In addition, the company deepens the integrated layout. The existing nickel smelting capacity of the company is 180000 tons, which can ensure the demand of 375000 tons + precursors. While ensuring the supply safety of the company’s main raw materials, it will effectively reduce the comprehensive production cost, improve the profitability of products and enhance the competitive advantage of the company.
The price rise of 21q4-22q1 liquid alkali affected some profits. It is expected that the increase in the proportion of nickel sulfate self supply will drive the profit to recover quarter by quarter, and the annual volume of the company will rise simultaneously. We expect that the company will ship about 50000 tons in Q1 in 2022. We expect that the shipment in Q2 in 2022 will increase by 10% month on month. With the release of new capacity, we expect to ship 25 Fawer Automotive Parts Limited Company(000030) 0000 tons in the whole year, an increase of 60% at the same time; In terms of profitability, affected by the rising cost of liquid alkali, the non net profit deducted per ton of 22q1 is about 4100 yuan / ton, which is significantly recovered from the 2200 yuan / ton of Q4 in 2021. However, due to the high price of Q1 liquid alkali in 2022, we expect to reduce the company’s non net profit deducted per ton by about 2000 yuan / ton. At present, the price of liquid alkali is still in the rising channel, but in 2022, the smelting capacity from Q2 high nickel matte to nickel sulfate will be put into operation. The self supply proportion of nickel sulfate is expected to increase from about 20% to about 30%, and the corresponding cost will be reduced by about 5001000 yuan / ton, which is expected to effectively hedge some cost increases, driving the profit per ton of Q2 to increase by about 5000 yuan / ton month on month. Throughout the year, the self supply proportion of nickel sulfate is expected to increase all the way to 35% – 40%, It will further drive the gradual recovery of the company’s profits. We expect that the annual net profit per ton of the company is expected to increase to 6000 yuan / ton, an increase of 35% year-on-year, and the annual volume and profit of the company rise together.
Profit forecast and investment rating: considering the impact of liquid alkali price fluctuation and nickel price rise, we adjusted the company’s net profit attributable to the parent company from 2022 to 2024 to RMB 1.8514547 billion (originally expected to be RMB 1.859/30.804321 billion), with a year-on-year increase of 92% / 86% / 36%, corresponding to pe37x / 20x / 14x. We gave 45xpe in 2022, with a target price of 132.8 yuan, maintaining the “buy” rating.
Risk tip: the sales volume of electric vehicles is lower than expected, and the price of raw materials fluctuates.
