Core view
The prosperity of non-ferrous metal industry continues to be high, and the performance continues to grow at a high speed. In recent years, the prosperity of non-ferrous metal industry has continued to rise. From 2016 to 2021, the operating revenue of the non-ferrous industry increased from 1.26 trillion yuan to 2.77 trillion yuan, with a compound annual growth rate of 14.1%. In addition to revenue, the profit level of the industry also continued to improve. In 2021, the non-ferrous sector achieved a net profit of 115.45 billion yuan, a year-on-year increase of 145.4%, and the growth rate reached a new high in recent five years. From the quarterly data, in the first quarter of 2022, the non-ferrous industry realized an operating revenue of 765.15 billion yuan, a year-on-year increase of 28.6%. The net profit was 43.98 billion yuan, a year-on-year increase of 119.7%.
The performance of subdivided sectors generally rose, with excellent performance of lithium and gold. From the perspective of sub sectors, the performance of sub sectors of nonferrous metals industry is generally good from 2021 to the first quarter of 2022. In 2021, lithium, non-metallic materials and magnetic materials ranked among the top three in terms of revenue growth among the sub sectors of the non-ferrous sector, with a year-on-year increase of 104.2%, 59.8% and 54.1% respectively. In 2021, lithium, lead-zinc and rare earth ranked among the top three in terms of net profit growth among the sub sectors of the nonferrous metals sector. The lithium sector turned losses into profits, and the net profit growth of lead-zinc and rare earth sectors was 601.4% and 340.2% respectively. In the first quarter of 2022, the Russian Ukrainian war broke out, global inflation was high, and the performance of the gold sector improved significantly. In the first quarter of 2022, the revenue of the gold sector increased by 34.1% and the net profit increased by 126.1%, which is the only sub sector with profit growth exceeding the industry average except the lithium sector.
The demand for new energy vehicles continued to grow, and the performance of lithium sector strengthened significantly. In 2021, the scene of new energy vehicle market was high, and the sales volume of new energy vehicles reached 3.507 million, with a year-on-year increase of 165.1%; The output reached 3.533 million, a year-on-year increase of 169.7%. From January to April 2022, the sales volume of Shanxi Guoxin Energy Corporation Limited(600617) vehicles reached 1.548 million, with a year-on-year increase of 114.8%; The output reached 1.597 million, a year-on-year increase of 113.1%, exceeding the annual output of new energy vehicles in 2020. Driven by the prosperity of new energy vehicles, lithium prices continued to rise. As of May 12, 2022, the quotation of battery grade lithium carbonate was 475000 yuan / ton, up 431.1%, and the quotation of lithium hydroxide was 468000 yuan / ton, up 484.4% year-on-year. In 2021, the performance of related companies in the lithium sector rose sharply, among which Tianqi Lithium Corporation(002466) realized net profit turning loss into profit, and Chengxin Lithium Group Co.Ltd(002240) , Ganfeng Lithium Co.Ltd(002460) , Sinomine Resource Group Co.Ltd(002738) realized net profit growth of 3030.3%, 410.3% and 220.3% respectively.
High inflation superimposed sanctions against Russia, and risk aversion pushed up the price of gold. In the first quarter of 2022, the global gold price continued to be strong, with a quarterly average price of US $187839/oz, significantly higher than that in the previous quarter. Behind the rise of gold price is the high inflation level of the United States. In April 2022, the CPI of the United States increased by 8.3% year-on-year, at a high level in nearly 40 years. In addition, since the beginning of this year, the interest rate spread of us 2-year-10-year treasury bonds has been upside down, the US economy is expected to decline, and the global risk aversion has increased due to the conflict between Russia and Ukraine. A number of factors have pushed up the price of gold together. With the rise of gold price and the prominent alpha attribute of related enterprises, the performance of gold enterprises strengthened in the first quarter of 2022, of which Zijin Mining Group Company Limited(601899) performance increased the most significantly, and the growth rate of net profit was as high as 143.9%.
Investment advice
All financial indicators of the non-ferrous metal industry showed an obvious positive trend, and the prosperity of the industry continued to rise. At the same time, with the continuous promotion of global automobile electrification transformation and the continuous high inflation level in the United States, lithium and gold sub sectors perform more prominently. With the continued prosperity of the industry in the future, relevant targets may benefit, such as Tianqi Lithium Corporation(002466) , Ganfeng Lithium Co.Ltd(002460) , Chifeng Jilong Gold Mining Co.Ltd(600988) , Shandong Gold Mining Co.Ltd(600547) , etc.
Risk tips
The demand for new energy vehicles was lower than expected, covid-19 epidemic was repeated, and commodity prices fluctuated abnormally.
