\u3000\u3000 Sichuan Development Lomon Co.Ltd(002312) (002312)
Event: on January 21, the company released the annual performance forecast for 2021. In 2021, the company expects to realize a net profit attributable to the parent company of RMB 900-11 billion, with a year-on-year increase of 34.58% – 64.49%; It is estimated that the net profit attributable to the parent company after deducting non-profit is RMB 600-750 million, with a year-on-year increase of 81.04% – 126.30%. Among them, 2021q4 company is expected to realize the net profit attributable to the parent company of 06-206 million yuan, with a year-on-year increase of – 85% ~ + 415%.
The high prosperity of phosphorus chemical industry has boosted the company’s performance. In 2021, the company’s performance increased significantly, and the net profit attributable to the parent company is expected to increase by 34.58% – 64.49% year-on-year, mainly due to the high prosperity of the phosphorus chemical industry in 2021 and the sharp rise in the price of the company’s main products. According to Ifind data, in 2021, the average price of monoammonium phosphate (73% wet powder) in China increased by 29.9% year-on-year, and the average price of calcium hydrogen phosphate increased by 52.9% year-on-year. In 2021q4, the average price of monoammonium phosphate (73% wet powder) in China increased by 43.7% year-on-year; The average price of calcium hydrogen phosphate increased by 112.4% year-on-year. While the product price continues to rise, the integration of the company’s own phosphorus chemical industry chain continues to deepen, and the self-sufficiency rate of raw materials continues to improve. The company can effectively control the production cost and promote the synchronous increase of the company’s product gross profit margin.
It is proposed to acquire Tianrui mining to improve phosphate rock production capacity and enhance integration advantages. On January 14, the company announced its acquisition plan for Tianrui mining, and planned to acquire 100% equity of Tianrui mining by issuing shares, with a transaction consideration of about 956 million yuan. Tianrui mining currently owns the phosphate mining right of tongchanggeng (No. 8 ore block) of laoheba Phosphate Mine in Mabian, Sichuan Province. The approved phosphate production capacity is 2.5 million tons / year, and the registered phosphate production capacity is 2 million tons / year. At present, the company’s Baizhu phosphate rock and Hongxing phosphate rock have a total phosphate rock production capacity of 1.15 million tons / year. After the acquisition, the company will have an annual phosphate rock production capacity of 3.65 million tons. The acquisition of Tianrui mining will significantly enhance the supply capacity of the company’s upstream phosphate rock and lay the foundation for the company’s subsequent capacity expansion.
Accelerate the layout of new energy materials industry and create a new growth curve. In 2021, the company accelerated its layout in the field of new energy materials and further expanded and extended the company’s phosphorus chemical industry chain. In November 2021, the company signed an agreement with the Management Committee of Deyang ABA eco economic Industrial Park to build 200000 t / a lithium iron phosphate and 200000 t / a iron phosphate production lines in two phases, which are expected to be completed in October 2023 and December 2024 respectively. In December 2021, the company signed an agreement with the Management Committee of Panzhihua vanadium titanium high Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) Development Zone to build a production line with an annual output of 200000 tons of lithium iron phosphate, 200000 tons of iron phosphate and 300000 tons of sulfuric acid, which is also constructed in two phases. It is expected to be completed and put into operation in October 2023 and December 2025 respectively.
Profit forecast, valuation and rating: the company’s performance is in line with expectations, and we maintain the company’s profit forecast. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 1.062/822/925 billion respectively, and the converted EPS will be RMB 0.60/0.47/0.52/share respectively, maintaining the “buy” rating of the company.
Risk tips: the landing risk of fixed increase projects, the risk of product price fluctuation, the downstream demand is less than expected, and the construction of raised investment projects is less than expected.
