\u3000\u3000 Ganfeng Lithium Co.Ltd(002460) (002460)
Events
On the evening of January 24, the company released the performance forecast for 2021. In 2021, it is expected to realize the net profit attributable to the parent company of RMB 4.8 billion-5.5 billion, with a year-on-year increase of 368.45% – 436.76%; The net profit deducted from non parent company was 2.9-3.6 billion yuan, with a year-on-year increase of 621.00% – 795.04%; EPS is 3.43-3.93 yuan.
Commentary
The performance greatly exceeded expectations, and the net profit of Q4 per ton was 74000 yuan. In 21 years, q1-q3 deducted 1.428 billion yuan of non parent net profit, Q4 deducted 1.472 billion yuan – 2.172 billion yuan of non parent net profit, an increase of 148% – 266% month on month. Taking the median net profit of Q4 as 1.822 billion yuan, considering the equity incentive expenses and deducting the profit of 100 million yuan from batteries and other businesses, the net profit of Q4 lithium salt products is about 1.85 billion yuan. It is estimated that the sales volume of Q4 lithium salt is 25000 tons and the net profit of Q4 single ton is about 74000 yuan.
Lithium industry is the leader, and its business runs through the whole industrial chain. The upstream continues to consolidate resources. Mountmarion mine and cauchari olaroz salt lake are the core guarantee of resources, and the resource self-sufficiency rate will continue to increase, which will be 38%, 51% and 60% respectively in 21-23 years. The smelting capacity in the middle reaches continues to increase, and the annual output of 21-23 is expected to be 98000 tons, 111000 tons and 132000 tons of LCE. The downstream lithium battery business has a large revenue, and the gross profit margin has increased steadily, contributing to a new increase in performance.
Performance flexibility and certainty in high business cycle. In this cycle, the profits of the industrial chain are partially transferred to the upstream, and the performance flexibility of the company is large under the rise of lithium price + the improvement of resource self-sufficiency rate. The company has newly invested 50000 tons of lithium hydroxide capacity and 40000 tons of lithium carbonate in the first phase of caucahri olaroz Salt Lake, which has been put into operation for 22 years to ensure the steady growth of production and sales. Considering the existing resource project layout and lithium salt production expansion plan, the production capacity of Sonora lithium clay in Mexico is 20000 tons + CO Salt Lake phase II 20000 tons + Mali goulamina spodumene mine project is 60000 tons. By 25 years, the production capacity is expected to exceed 260000 tons, realize the resource self-sufficiency rate of nearly 80%, the growth can be expected and account for nearly 20% of the global share.
Profit forecast & investment suggestions
We are optimistic that the company, as the leader of the lithium industry, has both performance flexibility + certainty + growth. According to the performance forecast of 21 years, the improvement of resource self-sufficiency rate in 22 and 23 years and the release of lithium salt production capacity, the net profit attributable to the parent company in 21-23 years will be increased by 82%, 240% and 269% to 5.180 billion yuan, 10.317 billion yuan and 12.499 billion yuan respectively, with corresponding EPS of 3.60 yuan, 7.18 yuan and 8.70 yuan respectively, and corresponding PE of 40 times 20 times and 16 times, raised to “buy” rating.
Risk tips
The uncertainty of lithium salt price trend in the later stage increases; The growth rate of lithium salt demand was lower than expected.
