\u3000\u3000 Sunresin New Materials Co.Ltd Xi’An(300487) (300487)
Event: the company released the performance forecast for 2021. In 21 years, the company is expected to realize the net profit attributable to the parent company of RMB 283-343 million, with a year-on-year increase of 40% – 70%, and the net profit deducted from the non attributable to the parent company of RMB 267-328 million, with a year-on-year increase of 47% – 81%. Among them, Q4 is expected to realize a net profit attributable to the parent company of 45-106 million yuan in a single quarter, with a year-on-year increase of 19% – 179% and a month on month change of – 48% – 21%.
Comments:
The downstream boom, production and sales growth, and the performance in 21 years exceeded the pre epidemic level: on the one hand, the company’s main adsorption and separation business benefited from the stable upward boom of gallium industry in the field of metal extraction, the rapid growth of lithium extraction demand from salt lake brine, the strong market demand for nickel and other metals, and the sales revenue of resin products and supporting system devices continued to grow. On the other hand, the company’s Gaoling and Pucheng new material industrial park projects have completed the main construction of the park. In order to meet the growth of downstream demand, the company continues to expand production capacity, resulting in a significant increase in the company’s Resin output. The downstream boom has improved, and the production and sales of the company’s resin products have increased, which has helped the company’s profit level in 2021 exceed the pre epidemic level. It is expected to realize a net profit attributable to the parent company of 283-343 million yuan in 21 years, an increase of 13% – 37% over 19 years; It is expected to realize a net profit of RMB 267-328 million after deduction, an increase of 8% – 33% over 19 years.
The demand for lithium resources is strong. As a technology leader, the company will fully benefit: the Shanxi Guoxin Energy Corporation Limited(600617) automobile industry is developing rapidly. In 2021, the sales volume of new energy vehicles reached 3.52 million, a year-on-year increase of 158%. Driven by terminal demand, the volume and price of lithium carbonate in China have risen simultaneously. According to the data of Baichuan Yingfu, China’s lithium carbonate capacity increased from 210000 tons in 2017 to 470000 tons in 2021, with an average annual compound growth rate of 22%. By the end of 2021, the price of battery grade lithium carbonate in China was 287000 yuan / ton, an increase of 419% over the price at the end of 20. Among the proven lithium resource reserves in China, salt lake resources account for 85% of the total reserves. The shortage of lithium resources will promote the development process of salt lake lithium resources. As a leading enterprise in the field of lithium extraction from Salt Lake, the company will fully benefit.
The orders for lithium extraction from the salt lake are sufficient, and the company’s future performance can be expected: at present, the company’s three major projects in the field of lithium extraction from the salt lake (10000 ton adsorption unit of cangge lithium industry, 3000 ton whole line operation of Jintai project and 1000 ton technical transformation of Minmetals project) have been successfully put into operation. In addition, the company signed a 4000t / a lithium carbonate production line contract with Jintai lithium industry, with a contract amount of 624 million yuan, and has received an advance payment of 54 million yuan; The company won the bid for the 10000 ton lithium carbonate EPC procurement project of Jinhai lithium industry, a joint venture subsidiary of Eve Energy Co.Ltd(300014) , with a contract amount of 456 million yuan; The company has signed strategic cooperation agreements with Eve Energy Co.Ltd(300014) and Tibet Guoneng Mining Co., Ltd. to carry out the salt lake industrialization of adsorption method in Tibet for the first time, jointly build 10000 tons of lithium hydroxide production line, and is expected to invest in the construction of 20000T / a lithium hydroxide production line in phase II and 20000T / a lithium hydroxide production line in phase III. It is expected that the order volume of salt lake lithium extraction business will significantly increase the company’s performance in the future.
Profit forecast, valuation and rating: we maintain the company’s profit forecast for 2021. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 300 / 385 / 514 million yuan and EPS will be 1.37/1.75/2.34 yuan respectively, maintaining the “overweight” rating.
Risk warning: the production progress is less than expected; International trade risks affect export sales; Falling product prices
